What Happened?
A number of stocks fell in the afternoon session after a surprisingly weak U.S. jobs report was released, fueling concerns about a slowing economy.
The U.S. economy added only 73,000 jobs, falling significantly short of economists' expectations, while figures for May and June were revised down, erasing 258,000 previously reported jobs. The professional and business services industry itself shed 14,000 jobs. This data points to a cooling labor market, fueling concerns of a slowing economy. A weaker economic outlook often leads to reduced corporate spending on key services like IT consulting and professional staffing, which directly impacts the sector's revenue and growth prospects. The report immediately increased investor expectations of an interest rate cut by the Federal Reserve.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.
Among others, the following stocks were impacted:
- IT Services & Consulting company EPAM (NYSE: EPAM) fell 3.3%. Is now the time to buy EPAM? Access our full analysis report here, it’s free.
- IT Services & Consulting company Kyndryl (NYSE: KD) fell 3.3%. Is now the time to buy Kyndryl? Access our full analysis report here, it’s free.
- Professional Staffing & HR Solutions company Alight (NYSE: ALIT) fell 3.7%. Is now the time to buy Alight? Access our full analysis report here, it’s free.
- Electronic Components & Manufacturing company Amphenol (NYSE: APH) fell 3.4%. Is now the time to buy Amphenol? Access our full analysis report here, it’s free.
- IT Distribution & Solutions company Avnet (NASDAQ: AVT) fell 3%. Is now the time to buy Avnet? Access our full analysis report here, it’s free.
Zooming In On Alight (ALIT)
Alight’s shares are not very volatile and have only had 9 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
Alight is down 24.1% since the beginning of the year, and at $5.13 per share, it is trading 39.4% below its 52-week high of $8.46 from November 2024. Investors who bought $1,000 worth of Alight’s shares at the IPO in July 2021 would now be looking at an investment worth $567.55.
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