Stocks Trade Mixed; Energy Falls; Tech Rises
Stocks traded mixed after fluctuating in a narrow range earlier Friday as investors considered a surprisingly small jobs gain in January amid a slew of stronger economic reports out earlier this week.
The Dow Jones Industrial Average fell les than 10 points on Friday, a day after the market closed moderately higher on Thursday, although the Dow ended at another 2 1/2-year high,after Federal Reserve Chairman Ben Bernanke indicated the central bank would continue to stimulate the economy.
JPMorgan and Bank of America led Dow components lower, while Boeing and Cisco gained.
The S&P 500 fell slightly, while the tech-heavy Nasdaq rose. The CBOE Volatility Index, widely considered the best gauge of fear in the market, fell to nearly 16.
Among key S&P 500 sectors, utilities, energy and financials fell, while technology rose.
The dollar gained against a basket of currenciesas the euro fell, while the price of gold rose to more than $1,353 an ounce.
Oil prices are falling as the dollar gains and on speculation the Egyptian government will be making an annoucement regarding Mubarek's future. U.S. light crude fell below $90 a barrel and Brent crude fell below $100 a barrel.
In economic news, the government reported only 36,000 jobs were added to nonfarm payrollsin January, up from a 103,000 gain in December. The unemployment rate, however, fell to 9 percent, the lowest level since April 2009, and down from 9.4 percent in December, the Labor Department said.
The number of jobs added was far less than the 145,000 analysts surveyed by Reuters had expected. Severe weather throughout the country may have caused a 32,000 drop in construction jobs and a 45,000 drop in courier and messenger jobs, the government said. In one bright sign, manufacturing added 49,000 jobs.
Stocks may not be trading off more despite the weak payrolls report because Treasury's are selling off sharply, sending the yield on the 30-year Treasury bond to 4.7 percent, and the 10-year note to 3.6 percent.
The move is providing some evidence the 30-year bull-market in bonds may be coming to an end, said Tom Schrader, managing director for U.S. Equity trading at Stifel Nicolaus Capital Markets.
"When people really start paying attention, they’ll move out of interest-rate sensitive issues, and possibly into equities," Schrader said.
Another reason for some support in equities is traders are focusing on revisions within the payrolls report and news that manufacturing jobs are gaining, he said.
While the turmoil in Egypt remains a concern, it has faded into the background as an issue for the markets on Friday, Schrader added.
The rise in the dollar and fall in the price of oil is pressuring materials and energy stocks. Among materials, steel producers AK Steel and US Steel led decliners, while oilfield services companies Halliburton and Baker Hughes , led energy stocks lower.
Meanwhile the tech sector lent support to the Nasdaq, led by soaring gain in JDS Uniphase . The optical component maker posted surprisingly strong results thanks to demand for more bandwidth in smartphones and tablets. At least nine brokerages raised their price targets for the stock. Rivals Finisar , Oclaro and Opnext also gained.
Also, Bank of America Merrilll Lynch re-instated coverage of the semiconductor sector with a bullish stance on revenue growth, saying it prefers companies that can take advantage of growth in smartphones and tablets, broadband, and cloud computing. As a result, the brokerage is less excited with companies geared to personal computing, such as AMD and Intel, which it gives "neutral" ratings. Texas Instruments, Broadcom and Nvidia received "buy" ratings.
Aetna reported earnings that easily beat analyst estimates. The insurance leader also boosted its outlook and increased its dividend, sending shares soaring.
In corporate news, Verizonhalted pre-ordersof Apple's iPhone online after less than one day, after what it said was "the most successful first day sales in the history of the company."
Meanwhile Research in Motion gained after Morgan Stanley upgraded the maker of the Blackberry to "equal weight" from "underweight" and citing growth in the market for smart phones and a rise in international sales of the Blackberry. National Bank Financial, meanwhile, started the company with an "outperform" rating.
In further earnings news, Coinstar's shares plummeted in after-hours trading after the company announced a weaker than expected outlook for the first quarter.
Clorox fell after reporting a 3 percent drop in sales, in line with what the consumer products company had expected.
Pulte Group gained despite reporting widening losses due to charges and and a drop in closings and new orders, as investors focused on the company's views that the housing market seems to be stabilizing.The news failed to help other homebuilders, which traded lower, including KB Home , DR Horton , and Hovnanian Enterprises .
And Fortune Brands gained after beating profit expectations, and saying its plans to separate into three companies remains on track.
Also in economic news, a monthly gauge of online demand for labor in the U.S. rose by 7 percent in January from a year ago, although government employment fell.
Shares rose in Europe as banks rallied after signs that corporate lending is starting to pick up.
Most Asian markets are closed due to Lunar New Year, but Japan closed up 1 percent.
On Tap for Next Week:
WEDNESDAY: Weekly mortgage applications, oil inventories, 10-year Treasury note auction, Bernanke testifies before U.S. House, Fannie/Freddie reform hearing, AmEx analyst meeting, HP announces new mobile strategy, Moody’s briefs on sovereign debt ratings; before-the-bell earnings from Coca-Cola, Nissan; after-the-bell earnings from Cisco, Activision Blizzard, MetLife, Prudential and WholeFoods.
THURSDAY: BoE announcement, jobless claims, wholesale trade, Atlanta Fed speaks, 30-year Treasury bond auction, Treasury budget, Ebay investor day, Verizon iPhone goes on sale; before-the-bell earnings from PepsiCo, Philip Morris and Sprint; after-the-bell earnings from Kraft and Expedia.
FRIDAY: International trade, consumer sentiment, Nokia analyst day; earnings from Discovery Communications.
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