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:

• Professional Staffing & HR Solutions company First Advantage (NASDAQ: FA) fell 4.2%. Is now the time to buy First Advantage? Access our full analysis report here, it’s free.
• Hardware & Infrastructure company Hewlett Packard Enterprise (NYSE: HPE) fell 3.5%. Is now the time to buy Hewlett Packard Enterprise? Access our full analysis report here, it’s free.
• Digital Media & Content Platforms company IAC (NASDAQ: IAC) fell 3.2%. Is now the time to buy IAC? Access our full analysis report here, it’s free.
• Advertising & Marketing Services company Ibotta (NYSE: IBTA) fell 3.5%. Is now the time to buy Ibotta? Access our full analysis report here, it’s free.
• IT Distribution & Solutions company Ingram Micro (NYSE: INGM) fell 3%. Is now the time to buy Ingram Micro? Access our full analysis report here, it’s free.

Zooming In On First Advantage (FA)

First Advantage’s shares are somewhat volatile and have had 11 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

First Advantage is down 9.7% since the beginning of the year, and at $16.64 per share, it is trading 18% below its 52-week high of $20.30 from October 2024. Investors who bought $1,000 worth of First Advantage’s shares at the IPO in June 2021 would now be looking at an investment worth $844.67.

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