Investors' repositioning for the new year collided with interest rate fears to kick off 2007 with trepidation and anxiety running through the financial markets, with the notable exception of tech and biotech stocks. Friday's stronger-than-expected jobs number forces the markets to wrap their arms around the idea that a recession is unlikely, and that is a relief. But they also need to embrace that the Federal Reserve is not opening the door to rate cuts anytime soon, and that is disappointing to many investors. The Dow Jones Industrial Average fell 0.6% Friday and 0.5% on the week to close at 12,398.33. The S&P 500 slipped 0.6% on Friday and 0.6% for the week to close at 1409.68. Only the Nasdaq Composite can call the first week of the year a strong one, thanks largely to Thursday's rally . The index shed 0.8% on Friday as providers of cell-phone components and chips reacted to Motorola's ( MOT) profit warning, but the Comp gained 0.8% on the week to close at 2434.25. The minutes from December's FOMC meeting, released Wednesday were, in sum, hawkish in that the Fed maintained a bias toward tightening amid concern about inflation. That wasn't a big surprise, but an early morning rally reversed when traders realized the central bank was not discussing a move to a more neutral policy stance. Friday's stronger-than-expected 167,000 non-farm payrolls report was a surprise, given payroll processor ADP's earlier employment forecast of 40,000 jobs lost in the month. To cut rates, the Fed would need to see some softening in the labor market to mark a true slowdown in the economy.