NEW YORK ( TheStreet) -- U.S. stocks finished the first trading week of 2012 with solid gains, even though equities failed to rally amid Friday's better-than-expected jobs data as concerns around Europe's sovereign debt troubles kept investor optimism in check.
The Dow Jones Industrial Average settled down 56 points, or 0.5%, at 12,360 after hitting a session low of 12,333. Despite the losses, the blue chips index posted a more than 1% gain for the holiday-shortened week.
Financial stocks were weak, with Bank of America (BAC) pulling down the blue chips index. About two-thirds of the Dow's 30 components closed in the red. Microsoft (MSFT), McDonald's (MCD) and Walt Disney (DIS) led the gainers.Stock futures jumped briefly after the federal government said that the unemployment rate fell to 8.5% in December, it's lowest level since February 2009, from a revised 8.7% in November. Meanwhile, the country added 200,000 jobs in December, with companies creating 212,000 jobs. Both figures beat forecasts from Thomson Reuters calling for 150,000 total new jobs and 165,000 private sector jobs. While the government's report showed a modest improvement from prior months, economists were quick to point out its shortcomings. One concern is that the 42,000 jobs gained in the couriers and messenger sector may be upwardly skewed because of seasonal factors. Also, economists say that weekly jobless claims need to fall further and that monthly payroll increases need to consistently come in north of the 250,000 mark to bring down the unemployment rate. As hiring picks up, those who gave up looking for jobs may start again, adding to risks that unemployment will actually rise in coming months. The consensus seemed to be that the U.S. jobs market is recovering slowly, but that monthly payrolls warrant further scrutiny going forward. Despite Europe being a wild card for the markets, Adrian Day, portfolio manager of Adrian Day Asset Management, said he remained upbeat for further rallying in the U.S. "There doesn't necessarily need to be good news, just an end to continued bad news from Europe," he said. "At some point, you get sellers exhaustion and people coming in to scoop up bargains. We're getting close to that." Investors are keeping a close eye on bond auctions in Italy and Spain next week. Renewed worries about Greece's debt struggles, potential downgrades of core eurozone economies, the ability of eurozone banks to raise capital and worsening problems in Hungary have all resurfaced in the new year.
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