NEW YORK ( The Street) -- Markets closed mixed on Friday after a worse-than-expected December jobs report underlined the rocky nature of the economic recovery.
- The S&P 500 added 0.23% to close at 1,842.37, while the Dow Jones Industrial Average was off 0.05% at 16,437.05. The Nasdaq finished up 0.44% to 4,174.67. The S&P and Nasdaq added 0.6% and 1.03%, respectively, in the first full trading week of 2014. The Dow lost 0.2% for the week.
- The December government jobs report missed expectations by a wide margin with an addition of 74,000 jobs versus expectations of 196,000. This was the worst monthly labor market performance reported by the government in three years. The jobless rate stood at 6.7% versus the prior 7% partly due to a shrinking labor participation rate.
- Several economist pointed to unseasonably severe winter weather as a reason for the poor jobs result. "Under those circumstances, we still expect the Fed to reduce its monthly asset purchases by a further $10bn at the upcoming FOMC meeting later this month," Capital Economics chief US economist Paul Ashworth told clients in a note.
- Richmond Fed President Jeffrey Lacker said he expected economic expansion to ease to 2% this year but added that the Fed's decision to cut monthly bond purchases by $10 billion to $75 billion in December was appropriate given better employment conditions. St. Louis Fed Bank President James Bullard is set to speak on the economy and monetary policy in Indianapolis at 1:05 p.m.
- Alcoa (AA) was a leading laggard in the S&P, shedding 5.4% to $10.11 after its results missed analyst expectations. Chevron (CVX) was down 1.9% to $121.01 after announcing fourth quarter profits would fall on the back of slumping oil and gas prices. Abercrombie & Fitch (ANF) surged 12% to $37.19 after hiking its full-year forecast on stronger-than-expected sales. And Twitter (TWTR) fell for a fifth straight day after an earlier analyst downgrade. The micro-blogging site slipped 0.09% to $57 a share.
- Germany's DAX closed up 0.55% while the London FTSE was 0.73% higher.
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