Stocks mixed after jobs report
Wall Street ended a strong week narrowly mixed Friday after the market absorbed a weaker-than-expected employment report that curbed investors’ bullish sentiment following three days of straight gains. Nonetheless, the major stock indexes had solid gains for the week.
The January jobs report, which showed the country’s unemployment rate at a four-month high of 4.6 percent, came as a surprise on Wall Street. A reading of 4.5 percent had been expected. The Labor Department report signaled employers were more cautious than expected in adding jobs in the new year. The economy added 111,000 jobs last month, below the 150,000 that had been expected.
Investors also received word from the Commerce Department that U.S. factory orders showed their biggest gain in nine months in December, rising 2.4 percent. Also, the final Reuters/University of Michigan consumer sentiment reading for January rose to 96.9 from 91.7 in December, its highest level in two years, but fell short of a preliminary reading of 98.
“They’re by no means terrible numbers here,” said Andy Richman, fixed-income strategist at SunTrust Bank’s personal asset management arm. He contends the readings signal the Federal Reserve’s strategy of standing pat on interest rates is working. “This validates their wait-and-hold approach is starting to pay off.”
The Dow Jones industrial average fell 20.19, or 0.16 percent, to 12,653.49. Shortly after the opening bell the Dow logged a fresh trading high of 12,683.93 before moving lower; the previous high, set Thursday, was 12,682.57.
Broader stock indicators were higher. The Standard & Poor’s 500 index rose 2.45, or 0.17 percent, to 1,448.39, its highest level in more than six years, and the Nasdaq composite index advanced 7.50, or 0.30 percent, to 2,475.88.
For the week, the Dow was up 1.33 percent, while the Nasdaq gained 1.66 percent and the S&P 1.84 percent.
Bonds were little changed following the economic data, with the yield on the benchmark 10-year Treasury note flat at 4.83 percent from late Thursday. The dollar was mixed against other major currencies, while gold prices fell.
Light, sweet crude settled up $1.72 at $59.02 per barrel on the New York Mercantile Exchange. Crude prices have risen this week on political concerns in the Middle East, and cold weather in the U.S. Northeast.
In a week full of corporate profit reports, the Fed’s decision on interest rates and the jobs report stood out and, as expected, played the greatest role in shaping investor sentiment. The central bank’s decision to leave short-term interest rates unchanged and its comments that the economy remains solid and that inflation appears to be in check helped drive stocks sharply higher.
The meandering trading Friday following three days of gains was somewhat typical of Wall Street’s behavior in the new year as run-ups have often been accompanied by a session or more of contemplation in which investors try to determine whether stocks are poised to move higher. Many investors regard the pauses as wise because they can indicate stocks aren’t simply pushing higher based on emotion or overly bullish sentiment.
Advancing issues outnumbered decliners by about 3 to 2 on the New York Stock Exchange, where volume came to 1.43 billion shares compared with 1.69 billion traded Thursday.
The Russell 2000 set a new closing high for the second straight day, rising 1.64, or 0.20 percent, to 809.41. And like the Dow, the Russell set a new trading high of 810.35; the previous high of 807.77 came at the close Thursday.
Overseas, Japan’s Nikkei stock average rose 0.16 percent. Britain’s FTSE 100 closed up 0.46 percent, Germany’s DAX index rose 0.50 percent, and France’s CAC-40 was finished up 0.27 percent.