NEW YORK ( TheStreet) -- The major U.S. equity averages finished a banner week with mild gains on Friday, extending multi-year highs, as investors looked ahead to the potential for more stimulus next week from the Federal Reserve.
While a weak August employment report engendered some disappointment that the U.S. economy wasn't able to build on the previous month's strong job creation, the shortfall in nonfarm payrolls also reinforced the perception that the central bank will unveil plans for another asset purchase program at its next policy meeting on Sept. 12-13.
Even a warning from chip giant Intel (INTC) wasn't enough to spark a round of profit-taking after Thursday's robust rally on enthusiasm about the European Central Bank's own bond-buying plan.
The Dow Jones Industrial Average closed up nearly 15 points, or 0.11%, at 13,306.64, the best finish since December 2007. The blue-chip index is now up 8.91% in 2012 after surging 1.6% this past week.Breadth was even within the Dow. The biggest percentage gainers were Alcoa (AA), Bank of America (BAC), and Caterpillar (CAT). The weakest performers were Cisco (CSCO), Intel, Kraft Foods (KFT), and Wal-Mart Stores (WMT). Intel shares were off nearly 4% after the world's biggest semiconductor company lowered its third-quarter revenue outlook, citing weaker than expected demand in a challenging macroeconomic environment. Kraft's stock dropped more than 5% after the company failed to impress Wall Street with the post-split outlook for its grocery business spin-off. The S&P 500 rose nearly 6 points, or 0.40%, to finish at 1438. The index gained 2.2% on the week and is now up 14.34% year-to-date and sitting at closing levels unseen since January 2008. Held back by Intel, the Nasdaq added less than a point, or 0.02%, to settle at 3136.42, another best closing level in more than decade. The index tacked on 2.3% for the week and is up 20.39% this year. Apple (AAPL - Get Report) shares hit a new all-time high during the session, as did Amazon (AMZN - Get Report), which rose more than 3% a day after unveiling well-received updates to its Kindle e-reader and Kindle Fire tablet product lines. Basic materials, consumer cyclicals and energy were the strongest sectors in the broad market, while health care, consumer non-cyclicals and utilities were in the red. Volume reached 3.70 billion on the Big Board and 1.74 billion on the Nasdaq. The Bureau of Labor Statistics said Friday that 96,000 jobs were added to the U.S. work force in August, far below the addition of 125,000 jobs that economists were expecting. Meanwhile, the report showed that the unemployment rate edged down to 8.1%, mainly because of a lower labor force participation rate, i.e. people halting their employment searches. Economists had expected the unemployment rate to stay at 8.3%. "The unemployment rate improved in August ... for the wrong reasons," said Russell Price, senior economist at Ameriprise Financial. Revisions to previous months hurt jobs growth by a total of 41,000. "With job growth returning to a double-digit pace, we believe those on the FOMC inclined to ease further will see their case bolstered sufficiently," said Dan Greenhaus, chief global strategist at BTIG.
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