Stocks Mixed Despite Job Data
Stocks closed mixed Friday, unable to extend Thursday’s strong rally despite solid November employment data. The major market indexes also ended the week mixed.
Rebounding oil and natural gas prices tempered investors’ enthusiasm, analysts said.
In other trading, gold continued to advance, reaching a 22-year high.
Wall Street traded in a narrow range after the Labor Department said U.S. employers added a net 215,000 jobs last month. Although it was the largest gain since July, the increase was in line with analysts’ expectations.
Declining issues led advancers for most of the session, but at the close, advancers edged out decliners on the New York Stock Exchange and on Nasdaq.
The Dow Jones industrial average, which jumped 106.70 points Thursday, ended with a loss of 35.06 points, or 0.3%, to 10,877.51.
But broader indexes were modestly higher. The technology-heavy Nasdaq composite gained 6.20 points, or 0.3%, to 2,273.37, a 4 1/2 -year high.
The Standard & Poor’s 500 inched up 0.41 point, or less than 0.1%, to 1,265.08. It remained below its 4 1/2 -year closing high of 1,268.25 reached a week earlier.
The NYSE composite index edged up 0.1% to a record high.
For the week, the Dow lost 0.5% and the S&P; 500 was off 0.3% after five straight weeks of gains. But Nasdaq was up 0.5%, extending its winning streak to seven weeks as more investors warmed to tech issues.
Stocks had surged in November on optimism about the economy and as energy prices and long-term interest rates fell. But the declines in energy costs and rates reversed this week.
Near-term crude oil futures rose 85 cents to $59.32 a barrel Friday, the highest level since Nov. 8. Natural gas futures surged 90 cents to $13.93 per million British thermal units, nearing the record of $14.34 set Oct. 25.
In the bond market, the 10-year Treasury note yield ended Friday at 4.51%, down from 4.52% on Thursday but up from 4.43% a week ago.
Bond investors’ concern is that because the economy is doing so well, the Federal Reserve’s credit-tightening campaign might go on longer than expected. Policymakers next meet Dec. 13.
“The numbers we’ve been getting are very healthy lately,” said Peter Cordrey, a bond manager at Prudential Investment Management. “To me, that’s a recipe for more Fed tightening.”
The continuing rally in gold seems to be signaling worries about higher inflation, which also could force the Fed’s hand, some experts say.
Near-term gold futures rose 80 cents Friday to $503.30 an ounce, the highest price since 1983. Gold surged $11.20 for the week and is up $65.80 for the year, or 15%.
The S&P; 500, by contrast, is up 4.4% this year.
But many analysts believe that the economy remains on a solid growth course without the danger of a further rise in inflation.
“I think we’re at a point where the data coming in is good and robust but not strong enough to suggest things are overheating,” said Jeff Kleintop, chief investment strategist for PNC Financial Services Group.
He said he expected volatile trading in stocks through December as investors keep a close watch on consumer spending during the crucial holiday sales period.
As to whether the market can extend its year-end advance, Kleintop said, “We’ve probably seen most of the fourth-quarter rally already. We may only see 3% to 4% more from here.”
In other market highlights:
* Tech stocks that boosted Nasdaq included Intel, up 25 cents to $27.43; Google, up $3.61 to $417.70; and Broadcom, up $1.18 to $48.77.
* Many energy-related issues advanced, including Schlumberger, up $1.04 to $98.99, and Chevron, up 47 cents to $59.18.
* Gold mining stocks were mostly lower despite the metal’s advance. Newmont Mining fell 79 cents to $46.48 and Placer Dome lost 38 cents to $21.92.
* Zimmer Holdings, which makes orthopedic products, rallied $5.44 to $69.66 after a Variant Research analyst said it would benefit from favorable pricing trends next year.
* Wyeth, maker of the Effexor antidepressant, gained $2 to $43.20; and Teva Pharmaceutical rose 75 cents to $42.09. The companies said the Federal Trade Commission would not file objections to the companies’ Effexor patent settlement.
* Luxury hotel chain Fairmont Hotels & Resorts gained $1.81 to $40.60 after billionaire investor Carl Icahn said he planned to launch a $40-a-share tender offer to capture a 51% stake in the company.
* U.S. Steel fell 80 cents to $48.11. UBS analyst Timna Tanners said the company was too large to be bought, and she cut her rating on the stock to “reduce” from “neutral.” The shares had risen 20% this week on speculation the company was a takeover target.
