Updated from 4:21 p.m. EDT
Stocks had a rocky session but ended slightly to the upside Friday afternoon as a robust jobs report was mostly overshadowed by lingering fears about the credit markets.
After falling more than 120 points, the
Dow Jones Industrial Average
rebounded to finish higher by 27.73 points, or 0.2%, to 13,595.10, and the
gained 1.21 points, or 0.08%, to 1509.65. The
was up 15.55 points, or 0.56%, at 2810.38.
"It was a pretty difficult day to explain, in terms of action," said Robert Pavlik, chief investment officer with Oaktree Asset Management. "The fact that the market finished in positive ground is something to be happy about. However, it's tough to walk away from today feeling great, given the great jobs report. We should've finished much stronger than we did today, and it raises questions leading into next week."
Earlier, a sizable rebound appeared to be in order after the Labor Department's nonfarm payrolls report showed that the economy added 166,000 jobs last month, more than doubling expectations.
"Sustained payroll growth at this pace would keep the
on hold indefinitely, but that's an unlikely prospect," said Ian Shepherdson, chief economist with High Frequency Economics. "This report reflects the relative strength of third-quarter
gross domestic product, and the rise in jobless claims is already signaling softer numbers ahead."
The report also said that the unemployment rate remained unchanged at 4.7%. Average hourly earnings rose 0.2%, slightly below consensus. The September and August data were revised to reflect 10,000 fewer jobs created.
Treasuries initially sold off after the report before rising. The 10-year note was up 13/32 in price, yielding 4.30%. The 30-year bond climbed 19/32 in price, yielding 4.60%.
New York Stock Exchange
4.28 billion shares changed hands, as decliners toppled advancers by a 6-to-5 margin. Volume on the Nasdaq reached 2.47 billion shares, with winners matching losers.
Blue chips finished the week with losses while tech managed a small gain. The Dow fell 1.5% and the S&P 500 slid 1.6%. The Nasdaq was 0.2% higher.
Stocks managed to put a bit of Thursday's drubbing behind them, when the Dow plunged 362.14 points, or 2.6%, to 13,567.87, and the Nasdaq sank 64.29 points, or 2.25%, to 2794.83.
As with the previous session, Citigroup led the financial sector lower with a 2% loss.
all finished lower by 4.4% or more.
"The financials are in a freefall again, as the subprime problem continued to rise to the surface," said Paul Mendelsohn, chief investment strategist with Windham Financial. "You can see through all these ancillary units that there's a flight to safety. Insurance companies are lower. We don't know what the cross-credit risks are yet."
Homebuilders were also suffering.
all lost more than 1.5%.
Peter Morici, professor at the University of Maryland School of Business and former chief economist at the U.S. International Trade Commission, said that unfortunately, this week's Fed statement suggested it's through cutting interest rates.
"This only served to further destabilize credit, stock and housing markets, and negate the potential positive effects of its quarter-point reduction in the federal funds rate."
Earnings took a backseat during the last day of the week, even as several big names were reporting results.
posted a 26% decline in third-quarter profit, which fell short of estimates. Chevron ended lower by 0.6% at $88.48.
Martha Stewart Living
posted a narrower-than-expected third-quarter loss, while
topped analysts' expectations for its latest quarter. Still, Martha Stewart declined 5.9% to $12.35, and NYSE Euronext lost 0.5% to $90.46.
also exceeded estimates and offered an upbeat forecast on its full-year profits.
were better than anticipated with their earnings.
Cigna shed 3.5% to $49.93, while Viacom rose 2.9% and Duke Energy advanced 1.1% to $19.03.
Among research calls, Deutsche Bank upgraded
to hold from sell, but downgraded
to sell from hold.
was downgraded at Bear Stearns.
Sprint rose 3.4% to end the day at $17.15, EA gained 2.9% to $60.46, and eBay tacked on 0.1% to $35.02.
Overseas markets were weak. London's FTSE 100 was down 1.3%, the Paris CAC 40 was off 0.6%, and Germany's Xetra Dax was 0.8% lower. In Asia, Hong Kong's Hang Seng dropped 3.3% overnight, and Japan's Nikkei 225 lost 2.1%.
Crude oil prices were again higher. The December front-month crude contract rose $2.44 in floor trading to close at $95.93 a barrel.