What Happened?
A number of stocks fell in the afternoon session after concerns about the health of the U.S. economy grew following a significant downward revision of job market data.
The Labor Department reported that employers added 911,000 fewer jobs from April 2024 through March than initially estimated. These "benchmark revisions" are issued annually to more accurately account for new and defunct businesses. The report detailed that the leisure and hospitality sector added 176,000 fewer jobs, professional and business services 158,000 fewer, and retailers 126,000 fewer. This weaker-than-expected data has fueled investor anxiety, as it suggests businesses may be becoming more reluctant to hire amid economic uncertainty. The numbers issued are preliminary, with final revisions scheduled for February 2026.
JPMorgan Chase CEO Jamie Dimon added that the U.S. economy is "weakening," though he stopped short of predicting a recession. "Whether it's on the way to recession or just weakening, I don't know," he said. Dimon's remarks are closely watched, given his influence as head of one of the nation's largest banks.
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:
- Renewable Energy company Fluence Energy (NASDAQ:FLNC) fell 5.3%. Is now the time to buy Fluence Energy? Access our full analysis report here, it’s free.
- Home Construction Materials company Builders FirstSource (NYSE:BLDR) fell 6.4%. Is now the time to buy Builders FirstSource? Access our full analysis report here, it’s free.
- Specialty Equipment Distributors company Alta (NYSE:ALTG) fell 4%. Is now the time to buy Alta? Access our full analysis report here, it’s free.
- HVAC and Water Systems company Lennox (NYSE:LII) fell 4.1%. Is now the time to buy Lennox? Access our full analysis report here, it’s free.
- Specialty Equipment Distributors company SiteOne (NYSE:SITE) fell 5.9%. Is now the time to buy SiteOne? Access our full analysis report here, it’s free.
Zooming In On Builders FirstSource (BLDR)
Builders FirstSource’s shares are quite volatile and have had 19 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.
The previous big move we wrote about was 21 days ago when the stock gained 3.3% on the news that a government report showed a surprise increase in U.S. housing starts for July, signaling stronger-than-expected construction activity. The U.S. Commerce Department reported that housing starts, a key measure of new residential construction, unexpectedly rose to an annual rate of 1.428 million in July, significantly beating economists' expectations of 1.30 million. The figure also represented a 12.9% increase from the prior year. This data suggests a resilient housing market, which is a positive signal for building material suppliers like Builders FirstSource, as more construction activity directly translates into higher demand for its products.
Adding to the positive sentiment for the sector, home improvement retailer Home Depot also posted higher quarterly sales and reaffirmed its outlook for the year.
Builders FirstSource is down 0.9% since the beginning of the year, and at $140.82 per share, it is trading 30.2% below its 52-week high of $201.83 from September 2024. Investors who bought $1,000 worth of Builders FirstSource’s shares 5 years ago would now be looking at an investment worth $4,552.
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