Wall Street closed out the week with a mixed performance Friday, showing more stability after its recent plunge but also revealing lingering signs of nervousness despite an upbeat report on employment.
The positive jobs data gave stocks a boost, but the gains were eroded by a jump in wholesale inventories and more evidence of subprime mortgage problems. Lending worries were a big factor in the market’s drop.
The Labor Department said that in February, the unemployment rate fell to 4.5 percent from 4.6 percent, U.S. employers added 97,000 nonfarm workers, and wages rose. But the Commerce Department’s report of a 0.7 percent increase in wholesale inventories in January pointed to a drop in demand and possible economic weakness.
Investors were also uninspired by speeches by Federal Reserve officials in the afternoon. Susan Bies, an outgoing member of the Fed’s rate-setting Open Market Committee, said the economy is strong and job creation is “incredible,” but that the troubles with the subprime lending market could escalate. Meanwhile, the Fed’s main hawk, Richmond Fed President Jeffrey Lacker, said that inflation expectations aren’t anchored enough.
Strength in the job market did help calm investors who feared that the economy might slow too abruptly, but it didn’t erase the skittishness in the market, which last week had its worst week in four years.
“Generally, most people are still concerned that this downdraft is not over,” said Doug Johnston, head of U.S. trading at Canaccord Adams in Boston. He said that while most economic data and corporate earnings have shown decent growth, investors are still spooked after last week’s dive. “The marketplace itself is an emotional animal.”
The Dow Jones industrial average rose 15.62, or 0.13 percent, to 12,276.32, after trading in both positive and negative territory over the course of the day.
Broader stock indicators were mixed. The Standard & Poor’s 500 index rose 0.96, or 0.07 percent, to 1,402.85, while the technology-dominated Nasdaq composite index fell 0.18, or 0.01 percent, to 2,387.55.
Advancing issues held a 3 to 2 advantage over decliners on the New York Stock Exchange.
Treasury bond prices fell sharply, as the jobs report made it more unlikely the Federal Reserve would lower rates. Though the report was slightly weaker than expected, bond investors had been positioned for an even softer number. The yield on the benchmark 10-year Treasury note shot up to 4.59 percent from 4.51 percent late Thursday.
Also supporting stocks Friday was a Commerce Department report that said the trade deficit narrowed slightly in January as U.S. exports rose to an all-time high while imports dropped. This sent a good signal that the nation’s trade imbalances may finally start to improve this year.
Consolidated volume on the NYSE came to 2.59 billion shares, down from 2.96 billion Thursday.
The Russell 2000 index of smaller companies was up 3.98, or 0.51 percent, at 785.12.
Oil prices dropped as traders took profits ahead of the weekend. Light, sweet crude fell $1.59 to $60.05 a barrel on the New York Mercantile Exchange.
Gold prices slipped, while the dollar rose against the euro and the yen.
Overseas, Japan’s Nikkei stock average closed up 0.43 percent and China’s Shanghai Composite Index gained 0.3 percent. Britain’s FTSE 100 was up 0.28 percent, Germany’s DAX index rose 0.05 percent, and France’s CAC-40 climbed 0.25 percent.
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