NEW YORK (TheStreet) -- U.S. stocks slipped into negative territory again in its final hour of trading Friday, though with only slight moves, as Wall Street overlooked a mixed October jobs report to digest the big picture of a tightening labor market. The Dow Jones Industrial Average and S&P 500 were just below their flatline, though remained on track for a third consecutive weekly gain.
The U.S. reported 214,000 jobs were added to the economy in October, less than an expected 231,000, while the unemployment rate dropped to 5.8% from 5.9% a month earlier. The labor participation rate edged slightly higher to 62.8% from 62.7%.
Watch the video below for a closer look at how U.S. markets are doing in midday trading Friday:
Hopes were high for a repeat performance of September's jobs report, when data showed a revised 256,000 jobs were added and the unemployment rate dropped to 5.9%, its lowest level in six years.
The overall case for an improving jobs market is strong. The U.S. economy has added at least 200,000 workers for nine consecutive months with an average 229,000 jobs added monthly so far this year, the fastest rate in 15 years. On Thursday, the number of claims for unemployment benefits in the U.S. declined 10,000 to 278,000, the lowest level in roughly 14 years, for the week ended Nov. 1. Analysts had expected claims of 283,000.
The Dow fell 0.06% and the S&P 500 inched 0.1% lower. The Nasdaq declined 0.3%.
U.S. Bank's senior fixed income strategist Dan Heckman said the markets are taking the weaker-than-expected headline jobs number in stride. "Equity investors are taking some profits," he said in a phone call. "There are aspects of the report that were good. There were aspects that were not troubling, but not as rosy as one would hope."
The weaker-than-expected numbers could give the Federal Reserve pause in deciding when to hike rates. "A rosy jobs picture will have all of the talking heads placing rate hikes in March of 2015, and a disappointing number will have those very same guys pushing a rate hike out toward 2016," predicted economist Stephen Guilfoyle in a note earlier this morning.
However, Federal Reserve Chair Janet Yellen is giving all signs that an increase will come sooner than later. Addressing a conference in Paris on Friday, Yellen said, "I continue to anticipate that the headwinds associated with the financial crisis will wane. As employment, economic activity, and inflation rates return to normal, monetary policy will eventually need to normalize too."
U.S. stocks had been rising to new record heights in anticipation of the data celebrating a second consecutive day of all-time closing highs on Thursday. Markets have been on a tear since midweek after the GOP seized the Senate, sparking hopes of pro-business economic policy, and following European Central Bank President Mario Draghi's hints of stimulus for the eurozone.
Monster Beverage (MNST) shares were the best performers on the S&P, adding 6.9% after reporting a 32% jump in quarterly profits. First Solar (FSLR) was dragging on the index, tumbling nearly 11% as profits sank 55% and revenue tanked 30% in its third quarter.
Salix Pharmaceuticals (SLXP) was one of the worst performers on the Nasdaq. The biopharmaceutical company tanked 33% after reporting an accounting error which revealed drug sales weaker than expected. Quarterly net income missed by 2 cents a share.
Sears (SHLD) shares were spiking 36% on news the retailer could sell as many as 300 of its stores to a real estate investment trust.
--Written by Keris Alison Lahiff in New York.