Stocks were flatly mixed Friday after a disappointing jobs report but were still on track to gain more than 1 percent for the week.
There was widespread talk that this might be the first month in almost two years to see job growth, but the Labor Department said the economy actually shed 85,000 jobs in December. The unemployment rate held steady at 10 percent.
But the revision for November showed 4,000 jobs were added that month, compared with the initial estimate that 11,000 were lost. That was the first job growth in two years. October was revised downward, however, making the net change for October-November a 1,000-job loss.
"I think the employment numbers really gave us a reality check," David Spika, investment strategist at WHG Funds, said on CNBC this morning. "Now, the trend of the recovery is still in place but I think what this showed us is maybe the market got a little ahead of itself," he said.
Stocks can still go higher, Spika said. He thinks the best place to be is in large-cap, high-quality names.
Wholesale inventories rose by 1.5 percent in November, while sales rose by the most in 10 months.
The Dow and S&P 500 were lower all morning but the Nasdaq pushed higher, powered by UPS and Logitech .
Just before the bell, economic bellwether UPSraised its fourth-quarter earnings forecastto 73 to 75 cents a share from the original 58 to 65 cents a share.
AIG was also at the top of the Nasdaq pack.
Two prominent lawmakers are requesting testimony from Treasury Secretary Geithner to determine if the NY Fed acted improperly in urging AIG to limit disclosure of payments to banks after getting a $180 billion government bailout.
Best Buy said same-store sales rose 8.2 percentin December amid strong demand for notebook computers, TVs and mobile phones, and backed its fiscal 2010 forecast, which calls for earnings between $3 and $3.15 a share.
Bank of America advanced following news that the bank is expected to return its bonuses to near 2007 levels, the Wall Street Journal reported.
But other bank stocks came under pressure after Citigroup cut its earnings outlooks for Goldman Sachs, JPMorgan Chase and Morgan Stanley.
And Goldman Sachs is being sued by a pension fundover its bonus plans.
One Fed speaker is on today's agenda, with Richmond Fed President Jeffrey Lacker scheduled to speak at a Maryland event at 1:30 pm. St. Louis Fed President James Bullard continues his tour of China today, telling a Shanghai audience that it would be good to see improvement in the U.S. job market prior to the Fed exiting its stimulus programs.
The Chinese stock market is about to become more like the U.S. and others: the government has given approval in principle to allow stock market index futures as well as short selling.
In other China-related news, new figures show that more than 13.5 million vehicles were sold in China in 2009, making it the world's biggest auto market as it overtakes the United States.
And today's docket has several other pieces of auto industry news: The Japan Automobile Dealers Association says the Toyota Prius was the top-selling car in Japan last year, the first time a hybrid has ever taken that spot. And Dutch carmaker Spyker has sweetened its bid for GM's Saab unit, though there's no indication yet how GM will respond to that bid.
The dollar/yen relationship may be worth watching today, as Japan's new finance minister backs off his call for a weaker yen, after he was apparently rebuked by the prime minister for that call.
— Peter Schacknow contributed to article.
Still to Come:
ALL WEEKEND: Consumer Electronics Show
FRIDAY: Fed's Lacker speaks; consumer credit
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