The stock market tanked Friday morning, but the major indexes had partially recovered by early afternoon. The Dow Jones Industrial Average (^DJI 0.08%) was down about 1.1% at 12:55 p.m. EDT. Tech stocks were hit particularly hard, with the tech-heavy Nasdaq Composite underperforming the Dow.
Nonfarm payrolls rose by 1.371 million in August, or by 1.027 million excluding government jobs. While it was a substantial gain, the total number of jobs is still more than 11 million below pre-pandemic levels. The unemployment rate was 8.4%, down from 10.2% in July.
Apple (AAPL 1.37%) stock was down big Friday morning but had clawed its way back to a modest loss by the afternoon. Salesforce (CRM -0.34%) wasn't as lucky, with shares of the software company nursing a 5% loss a few hours before market close.
Apple stock down again
Following a brutal decline on Thursday, shares of Apple slumped again on Friday. The tech stock was down as much as 8% in the morning, but that loss had shrunk to less than 1% by early afternoon.
There was some news that could be playing a role in the decline. Bloomberg reported that Apple's ongoing battle with Epic Games over its App Store policies and fees has led Japan's antitrust regulator to scrutinize the company's practices. Japanese game developers have complained about Apple's inconsistent enforcement of policies, unpredictable content decisions, and a lack of communication, according to Bloomberg's sources.
Apple's App Store is the only way to download apps on the company's iOS devices, and it has strict rules that prevent developers from skirting its fees. Apple takes as much as 30% of all purchases through the App Store, including in-app purchases of digital items.
Whether this level of control over apps on its platform is enough for antitrust regulators to take action remains to be seen. If Apple is forced to allow third-party app stores or to allow payments to be processed outside of its systems, the company's vast and growing services segment could take a hit.
While Apple stock had largely recovered from a big morning loss on Friday, the stock is down around 13% from its all-time high.
Salesforce continues poor performance as part of the Dow
Cloud software giant Salesforce was added to the Dow on Aug. 31, a move made in response to Apple's stock split. Because the Dow is weighted by stock price, Apple's stock split would have lowered the weighting of tech in the index. Salesforce replaced ExxonMobil, which had been part of the Dow for nearly a century.
Salesforce was added to the Dow right after an epic post-earnings rally that pushed the stock to new highs. Revenue soared 29% year over year, beating analyst expectations, and the company raised its full-year guidance. As of Aug. 28, Salesforce was up about 67% year to date. Things have not gone well since then for the stock. The stock is now down 7.5% since joining the Dow, plunging roughly 5.5% on Friday by early afternoon.
Salesforce is an expensive stock. Based on the company's full-year guidance, the stock trades for roughly 11 times sales and nearly 70 times adjusted earnings. The adjusted earnings number backs out stock-based compensation, which totaled more than $1 billion in the first six months of the current fiscal year. Adding back stock-based compensation would push Salesforce's price-to-earnings ratio into the stratosphere.
High-flying stocks were being punished on Friday. Salesforce was no exception.