Stocks mixed after job data
The stock market took a break Friday from its big rally, producing little movement in the major indexes, after the government’s November labor report showed tepid job growth as well as a pickup in inflation.
The key gauges ended the week higher, and the Dow Jones industrial average was up nearly 900 points over nine trading days.
The Labor Department reported that U.S. payrolls grew by 94,000 jobs in November, less than the 100,000-job increase forecast on average by economists. The unemployment rate held steady at 4.7%. The report also showed that average hourly earnings rose 0.5%, compared with forecasts averaging 0.3%.
The report at least temporarily chilled a rally that has put the Dow within 540 points of the record close it reached Oct. 9.
“I’d call it an employment letdown,” said Jack A. Ablin, chief investment officer at Harris Private Bank. “A little air came out of the party balloon.”
“Stocks are taking a breather from a maniacal run-up over the last few days,” said Paul Nolte, director of investments at Hinsdale Associates. He described the stock market as paralyzed until the Federal Reserve’s meeting on interest rates Tuesday.
On the plus side, the report gave the Fed more room to lower rates next week. The debate now centers on whether the cut will be a quarter-point or a half-point.
The Dow edged up 5.69 points to 13,625.58 while the Standard & Poor’s 500 index fell 2.68 points, or 0.2%, to 1,504.66.
The technology-dominated Nasdaq composite index slipped 2.87 points, or 0.1%, to 2,706.16. The Russell 2,000 index of smaller companies fell 1.43 points, or 0.2%, to 785.52.
For the week, the Dow surged 1.9%, the S&P; climbed 1.6%, the Nasdaq jumped 1.7% and the Russell 2,000 rallied 2.3%.
Advancers narrowly outnumbered decliners Friday on the New York Stock Exchange.
Investors grew more confident during the week about the overall health of the economy and the country’s ability to weather the months-long credit crisis. Stocks’ big advance over the last two weeks came as the Fed indicated it was indeed concerned about slowing economic growth, and as financial institutions and the government took steps to mitigate the damage from billions of dollars in soured mortgages and credit losses.
Bond yields rose Friday. The benchmark 10-year Treasury note rose to 4.11% from 4.01% late Thursday. The dollar was mixed against other major currencies while gold prices fell.
Oil prices slumped, boosting airline and other transportation stocks, which also got a lift from November traffic reports showing carriers making inroads in offsetting fuel costs. Crude futures fell $1.95 to $88.28 a barrel on the New York Mercantile Exchange. The Dow Jones transportation average rose 86.82 points, or 1.8%, to 4,876.35.
In other market highlights:
* Macrovision agreed to buy Gemstar-TV Guide International for $2.8 billion in cash and stock. Shares of Macrovision, which develops technology to prevent unauthorized use of digital content, slid $5.55, or 21%, to $20.44. Hollywood-based Gemstar, a provider of TV listings, lost 99 cents, or 17%, to $4.99.
* Amgen dropped $3.05, or 5.5%, to $52.10. The Thousand Oaks-based biotech company said a government advisory panel would meet as part of a continuing review of the class of drugs that includes Amgen’s anemia medicine Aranesp.
* American Express and Capital One Financial dropped after Merrill Lynch said a slowing of consumer spending would reduce earnings at credit card companies. American Express dropped $2.57, or 4.3%, to $56.96. Capital One slumped $2.63, or 5%, to $49.80. Discover Financial Services, spun off by Morgan Stanley in June, fell 56 cents, or 3.2%, to $16.76.
* Imax soared $2.68, or 58%, to $7.32 after the company said it would install its digital screens in 100 AMC Entertainment theaters over the next two years.
* Palm fell 85 cents, or 13%, to $5.74 after the hand-held-computer maker cut its revenue forecast because of shipping delays.
* Gun maker Smith & Wesson Holding plunged $2.84, or 29%, to $7.08 after slashing its earnings projection for the fiscal year that ends next April.
* Cascade sank $11.11, or 17%, to $53.22. The forklift attachment maker’s quarterly earnings fell short of expectations.
* Overseas, key stock indexes rose 0.5% in Japan, 1.1% in Britain, 0.7% in Germany and 0.8% in France. Shares sank 2.4% in Hong Kong.
