IXIC: Nasdaq Composite Futures Sink 6% After Weak Jobs Report Flags Wobbling Economy

Nonfarm payrolls released Friday badly undershot expectations and signaled a derailing economy. Stocks sold off big, big time.

• The Nasdaq Composite IXIC swung into correction territory — down more than 10% from its record high in mid-July — after Friday’s jobs data flagged a flailing economy. The tech-heavy Wall Street benchmark fell dramatically by nearly 2.5%, at one point being down more than 3% on the day. The other two major benchmarks also logged big declines. The broad-based S&P 500 slipped 1.8% and the 30-stock Dow Jones Industrial Average erased 1.5%, or 610 points. Monday morning, futures showed a shocking 6% drop in the tech-heavy stock average at the opening bell.
• Friday’s selloff was triggered by a painful jobs report, which wasn’t even remotely close to what analysts had expected. The nonfarm payrolls for July showed 114,000 new jobs created, badly undershooting consensus views of 174,000. The unemployment rate rose to 4.3%, the highest level in nearly three years. The data stoked fears over the trajectory of the economy as investors began to wonder whether the Fed had missed the opportunity to act by cutting interest rates before things started crumbling.
• Now, markets are no longer pricing in a single 25-basis-point trim to borrowing costs when the Federal Reserve meets in September. Instead, they’re looking for a juicier 50-basis-point slash to interest rate — a more aggressive measure that would raise the chances of steering the economy away from a possible recession. US futures contracts broadly were flashing deep losses ahead of the opening bell while the US dollar was spiraling across the forex board.