Dow Ends to Downside
Robert Holmes
02/02/07 - 04:47 PM EST
Updated from 4:11 p.m. EST
Stocks closed narrowly mixed Friday as uncertainty about how the
Federal Reserve will interpret the latest employment report kept the major indices in a holding pattern.
The monthly jobs data, among the most important pieces of economic information the government releases every month, showed that 111,000 workers were added to U.S. payrolls in January. Economists had expected 150,000 positions created, according to a
Bloomberg poll.
When the session wrapped up, the
Dow Jones Industrial Average had fallen 20.19 points, or 0.16%, at 12,653.49. The
S&P 500 was up 2.45 points, or 0.17%, to 1448.39, and the
Nasdaq Composite added 7.50 points, or 0.3%, to 2475.88.
The jobless rate rose to 4.6% from 4.5%. No change had been anticipated. Average hourly earnings, a key inflation metric, rose a less-than-expected 0.2%.
Meanwhile, in what is becoming fairly routine, job growth for the prior two months was revised upward. The Labor Department now says 81,000 more employees were put to work in November and December than had been first thought.
"The report continues to lead the market along the 'Goldilocks' scenario of no inflation with modest growth," said Robert Pavlik, chief investment officer with Oaktree Asset Management. "What might've derailed some of the market's move was the bump up in oil prices back over $59 a barrel. The fact that the Fed said early this week that inflation is under control should help the market look past some of this."
Bond traders sent rates down, suggesting they believe the numbers are more indicative of a cooling off of the economy than strength. Lately, the 10-year note was up 2/32 in price and yielding 4.83%, and the 30-year bond advanced 2/32 to yield 4.93%.
Elsewhere, the University of Michigan's consumer sentiment index slipped to a revised January reading of 96.9 from a preliminary 98.0. Economists expected a slight decrease to 97.8.
Additionally, the Commerce Department said that factory orders rose a greater-than-expected 2.4% during December.
All told, the Dow was higher for the week by 166 points, or 1.3%. The Nasdaq rose 41 points, or 1.7%, and the S&P 500 added 26 points, or 1.8%.
Roughly 2.58 billion shares changed hands on the
New York Stock Exchange. Advancers beat decliners by a 9-to-7 margin. Volume on the Nasdaq reached nearly 1.92 billion shares, with winners outpacing losers 8 to 7.
On the commodities front, oil futures jumped $1.72 to close at $59.02 a barrel. Natural gas was lower, down 5 cents to $7.48 per million British thermal units. Gold finished lower by $11.50 at $651.50 an ounce, and silver tumbled 35 cents at $13.37 an ounce.
Stocks are coming off a day on which the Dow rose 51.99 points, or 0.41%, to 12,673.68, a record closing high. The S&P 500 gained 7.70 points, or 0.54%, to 1445.94, and the Nasdaq overcame declines in
Google (GOOG Quote) and
Dell (DELL Quote) to tack on 4.45 points, or 0.18%, to 2468.38.
After the close, another tech heavyweight,
Amazon.com (AMZN Quote), posted earnings that exceeded analysts' fourth-quarter expectations and lifted its revenue outlook for the first quarter.
Still, the Internet bookseller's shares fell by $1.31, or 3.4%, to end the day at $37.39.
Also following the last close, video-game maker
Electronic Arts (ERTS Quote) reported fiscal third-quarter earnings of $160 million, or 50 cents a share, falling 38% from the year-ago period. Excluding items, the company earned 63 cents a share, beating estimates, and the stock gained 59 cents, or 1.2%, to $51.13.
Chevron (CVX Quote) posted a fourth-quarter profit of $3.77 billion, or $1.74 a share, down 9% from the year-ago quarter due to a decline in natural gas prices. Still, results beat the Thomson First Call consensus by a penny. Chevron slid 43 cents, or 0.6%, to $74.04.
Elsewhere,
Ericsson (ERIC Quote) slumped 5.6% to $37.12 after CEO Carl-Henric Svanberg said the cell-phone infrastructure market might grow only about 5% this year rather than earlier predictions of 5% to 9%. However, the company didn't cut its own forecasts.
Among ratings changes, Banc of America Securities upgraded
Microsoft (MSFT Quote) to buy from neutral, citing the likelihood of higher earnings for fiscal 2008 than current expectations. Microsoft was off 37 cents, or 1.2%, to close at $30.19.
Shares of
FedEx (FDX Quote) rose after Deutsche Securities upgraded the shipper to buy from hold while raising its stock price target to $130 from $117. The stock added $3.09, or 2.8%, to $114.98.
Equities were mostly stronger overseas. Frankfurt's Xetra DAX tacked on 0.5% at 6886, while London's FTSE rose 0.5% at 6311. Tokyo's Nikkei rose 0.2% overnight to 17,547, and Hong Kong's Hang Seng gained 0.7% to 20,563.
