Stocks fell on Wall Street in afternoon trading Friday as technology and health care companies gave up some of their gains from earlier in the week.
Even with the pullback, which followed a slide in markets around the world, the S&P 500 remained on track for its best week in eight months.
Stocks have rallied sharply since Monday and had erased all their earlier losses from worries about economic fallout from a new virus from China that’s rapidly spreading. Stronger-than-expected reports on corporate profits and the U.S. economy have helped assuage the fears, as has increasing hope that central banks and governments around the world can support markets with rate cuts and stimulus.
The recent gains were so strong, however, that some market watchers caution that stocks may have gotten ahead of themselves. In the parlance of markets, some analysts said stocks had become “overbought.” That’s because health experts are still unsure about how far the virus will spread, how deadly it may be and how much damage it will ultimately cause the global economy.
That uncertainty overshadowed the latest encouraging data point on the U.S. economy. A government report on Friday morning showed that many more jobs were created in January than economists expected. Employers added 225,000 last month, comfortably above forecasts for 161,500 and December’s pace of 147,000.
Economic reports from outside the United States, meanwhile, were more discouraging and helped lead markets lower before trading opened in New York.
Payment products company FleetCor Technologies led the tech sector slide, dropping 6.9%.
Financial, industrial and material stocks also fell, outweighing slight gains by household goods makers and communication services companies.
KEEPING SCORE: The S&P 500 was down 0.4% as of 1:48 p.m. Eastern time. That trims its gain for the week to 3.3%, which would still be its best performance since June.
The index pared its loss as the morning progressed and had been down as much as 0.6% shortly after trading began.
The Dow Jones Industrial Average dropped 239 points, or 0.8%, to 29,140, and the Nasdaq was down 0.4%.
Stocks markets in Europe were down. Major indexes in Asia ended lower.
HEALTHY SIGN: The U.S. jobs report is usually the most anticipated piece of economic data every month, and Friday’s report did not disappoint. Economists are impressed with how many jobs employers are adding, particularly more than a decade into this economic expansion.
Wages for workers, meanwhile, paint a more mixed picture. Average hourly earnings were 3.1% higher in January than a year earlier. That’s a touch above December’s 3% rise, but the figure has been on a general trend downward since peaking at 3.5% last summer.
VIRUS UPDATE: The encouraging report on hiring notwithstanding, the big wild card for the economy is how much damage the outbreak of a virus spreading from China will do.
The virus has infected more than 31,400 people around the world, and killed more than 630, nearly all of them in China. The director-general of the World Health Organization said Friday that a drop in the number of new virus cases for two days is “good news” but also cautioned against reading too much into that.
Chinese factories and offices are starting to reopen following an extended Lunar New Year holiday, but companies are forecasting big revenue declines due to the closure of stores, amusement parks, cinemas and other businesses.
Japan’s Fast Retailing announced it has closed 350 stores, or about half of its 750 outlets in China to comply with quarantine regulations, while Toyota Motor said it was extending production stoppages at its China factories by an extra week, to Feb. 16. Nissan Motor said January sales of the company and its local partners fell nearly 12% in January from a year earlier due to the virus outbreak and the prolonged holidays.
YIELDS: In a sign of the market’s caution, Treasury yields fell as prices for ultra-safe U.S. government bonds rose. The yield on the 10-year Treasury dropped to 1.58% from 1.64% late Thursday.
WEAKENED DEMAND: The price of crude oil has swung violently in recent weeks with worries about the virus, and how much it will sap away demand for fuel because of drop-offs in tourism, travel and other economic activity.
Benchmark U.S. crude fell 41 cents to $50.54 per barrel. It dropped below $50 earlier this week, after being above $60 toward the start of the year.
Brent crude, the international standard, slid 27 cents to $54.66 per barrel.
DRILLED: The latest drop in oil prices weighed on energy stocks. Halliburton fell 1.4%.
Energy stocks in the S&P 500 are down more than 11% over the last month. Every other sector in the S&P 500 is up over the same time.
AP Business Writer Joe McDonald contributed.