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Dow Futures Fall On Jobs Report Wage Gain; Tesla Stock Takes Hit As Chief Accountant Exits, Elon Musk Smokes Pot

Dow futures extended losses Friday, as the U.S. added more jobs than expected and wage growth hit a nine-year high. Tesla (TSLA) retreated as its new chief accountant left and CEO Elon Musk appeared to smoke pot during an interview, adding to questions about Musk’s judgment and drug use. Meanwhile, a trio of top stocks —  Palo Alto Networks (PANW), Okta (OKTA) and Five Below (FIVE) — signaled gap-ups to record highs after strong earnings.

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Dow Futures Today

Dow futures fell 0.3% vs. fair value. S&P 500 futures slipped 0.3%. Nasdaq 100 futures lost nearly 0.6%. The Nasdaq composite has fallen for three straight days, including significant losses in the prior two sessions as tech and other growth stocks retreat.

Jobs Report

The U.S. added 201,000 jobs in August, with the unemployment rate holding at 3.9%. Average hourly earnings rose 2.9% vs. a year earlier, up from 2.7%. The monthly wage gain was 0.4%.

Economists expected the August jobs report to show a gain of 195,000 jobs, with the jobless rate dipping to 3.8% and average hourly earnings ticking up to a 2.8% gain. The wage figure is key to whether the Federal Reserve will continue its gradual Fed rate hike path.

Elon Musk Smokes Pot; New Chief Accountant Leaves

Elon Musk drank whiskey and appeared to smoke marijuana during an interview on “The Joe Rogan Experience” podcast. As Rogan and Musk both noted, smoking marijuana is “totally legal” in California. But it comes amid growing doubts about Musk’s judgment, from his go-private, “funding secured” saga to his continued claims that a Thai cave rescuer is a pedophile. Many of those concerns involve Musk’s reported extensive drug use.

Meanwhile, Tesla Chief Accounting Officer Dave Morton resigned after a month on the job, the company said in an SEC 8K filing.

“Since I joined Tesla on August 6, the level of public attention placed on the company, as well as the pace within the company, have exceeded my expectations,” Morton said in the filing. “As a result, this caused me to reconsider my future.”

Morton’s exit, coming as Tesla runs low on cash, appeared to worry Wall Street more than Musk smoking pot.

Tesla stock fell 5% to 266.89 before the open in Friday’s stock market trading. Shares are already down 6.9% so far this week, hitting a three-month low, after a 6.55% skid last week. Tesla stock is well off the near-record 387.46 set on Aug. 7 following the brief excitement over Musk’s go-private tweet.

Tesla stock is approaching its April 2018 low of 244.59. But its relative strength line, which tracks a stock’s performance vs. the S&P 500 index, has fallen to an 18-month low.

Tesla’s junk bonds fell to a new low.

Cybersecurity Stocks Rally

Palo Alto Networks earnings and sales growth crushed views. Fellow cybersecurity stock Okta also topped views, with strong revenue growth and a smaller-than-expect loss.

Palo Alto stock rose nearly 7% and Okta stock spiked 14%. Palo Alto had closed Thursday in a buy range. Okta stock was just below a buy point after undercutting that key level earlier in the week. Both are indicated at record highs.

Five Below Stock Spikes

The teen-and-tween-focused discount retailer sprinted higher. Five Below earnings leapt 50% amid hefty sales growth. Five Below stock shot up 13%, signaling a record high.

China Trade War Escalation: Deadline Passes

President Donald Trump can slap tariffs on a further $200 billion in Chinese imports now that a public comment period ended Thursday. But midnight passed with no action so far. The $200 billion would be on top of 25% Trump tariffs on $50 billion worth of Chinese goods. Meanwhile, U.S.-Canada trade talks continue.

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