News

By Sinéad Carew and Bansari Mayur Kamdar

March 8 (Reuters) - The S&P 500 and the Nasdaq lost ground on Friday after touching record highs, with high-flying chip stocks going into reverse and a labor market report that showed more new jobs than expected while the unemployment rate also unexpectedly rose.

The S&P and Nasdaq briefly hit intraday record highs but started to lose steam late morning. The Philadelphia Semiconductor Index .SOX rose to an intraday record and then retreated to lead declines.

Artificial intelligence chip darling Nvidia NVDA.O lost ground after rising more than 5% and hitting a record high.It had closed higher for the previous six sessions.

In the chip index, BroadcomAVGO.Oalso sank after its full-year forecast failed to impress investors and Marvell TechnologyMRVL.O fell after it forecast first-quarter results below market expectations on soft demand.

Stocks opened higher after data showed U.S. job growth accelerated in February, with nonfarm payrolls increasing by 275,000 jobs against an expected 200,000 rise. January jobs numbers were revised lower.

Also, the unemployment rate rose to 3.9% in February after holding at 3.7% for three straight months, while wage growth slowed to 0.1% on a monthly basis.

"Today is just profit taking," said Brian Price, head of investment management for Commonwealth Financial Network who described the week as "a microcosm of the year so far" with modest pull backs and buyers stepping in.

Price pointed to some signs of consumers being more discretionary in spending, with Costco Wholesale COST.Oshares losing ground as quarterly sales fell short of estimates due to tepid demand for higher-margin goods.

But Price said "the general bias right now is for the market to continue to move higher, absent negative catalysts."

"That's really what the market is hanging its hat on right now, that inflation is going to continue to be benign, that the Fed is going to start to ease."

Next week's February data including consumer prices (CPI) and retail sales will offer more cues on the prospects for potential rate cuts.

According to preliminary data, the S&P 500 .SPX lost 32.99 points, or 0.64%, to end at 5,124.37 points, while the Nasdaq Composite .IXIC lost 185.22 points, or 1.14%, to 16,085.11. The Dow Jones Industrial Average .DJI fell 66.28 points, or 0.17%, to 38,725.74.

"When you've markets which have run up as much as this has since the start of the year, with returns coming in a strong as they have, these types of pull backs are healthy to see."

On Thursday, Federal Reserve Chair Jerome Powell said the central bank was "not far" from gaining the confidence that inflation is falling sufficiently to begin cutting interest rates.

GapGPS.N shares rose after the retailer beat Wall Street expectations for fourth-quarter results, buoyed by strong demand on improved product offerings at its Old Navy and namesake brands during the holiday season, and lower markdowns.

(Reporting by Sinéad Carew in New York, Bansari Mayur Kamdar and Amruta Khandekar in Bengaluru; additional reporting by Pranav Kashyap; Editing by Maju Samuel and David Gregorio)

((sinead.carew@thomsonreuters.com; +13322191897;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.