The Dow was little changed on Friday, notching a winning week as optimism about a short-term debt ceiling deal trumped a disappointing jobs report.
The Dow Jones Industrial Average dropped 8.69 points to 34,746.25. The S&P 500 fell about 0.2% to 4,391.34. The technology-focused Nasdaq Composite fell 0.5% to 14,579.54.
related investing news
The major averages all ended in the green for the week. The Dow rose 1.2% for its best week since June. The S&P 500 rose about 0.8% for its best week since August. The Nasdaq rose just shy of 0.1% since Monday.
Energy stocks plowed higher on Friday as West Texas Intermediate crude futures, the U.S. oil benchmark, crossed $80 per barrel on Friday for the first time since November 2014. WTI crude settled at $79.35. Exxon Mobil rose 2.5%, Chevron advanced 2.2% and ConocoPhillips added nearly 4.8%.
There was something for both bears and bulls in Friday's jobs report, which explains the gyrations in stocks following the release. The headline number was a major disappointment as the economy added just 194,000 jobs in September, the Labor Department reported. That was well below the Dow Jones estimate of 500,000.
On the positive side, the unemployment rate itself fell to a much lower point than economists forecast. At 4.8%, that's the same level seen in late 2016. Plus, August's jobs report was revised up to 366,000 compared to the initial read of 235,000.
A bleaker labor picture could stall the Federal Reserve, as it prepares to slow its $120 billion-per-month bond-buying program.
"This jobs number could call into question the starting point for taper late this year," said Jamie Cox, managing partner for Harris Financial Group. "There are lots of positives in the report, like an uptick in average hourly earnings, but not enough to sugar coat the fact the employment picture remains murky with all the Covid related cross currents."
The Department of Labor said Thursday that jobless claims for the prior week totaled 326,000. That was lower than the 345,000 economists had been calling for. Continuing claims, meanwhile, declined by 97,000 to 2.71 million.
Stocks are coming off a volatile week but the major averages weren't derailed by the debt ceiling debacle. Stocks advanced during regular trading on Thursday as Washington reached a deal to raise the debt ceiling into December.
Uncertainty around the debt ceiling had been a headwind for the market but other risks remain, including accelerating inflation and rising rates. The 10-year Treasury yield was around 1.57% on Thursday, and UBS sees it rising to 1.8% by the end of the year.
Wall Street is also preparing for third-quarter earnings season, which kicks off next week.
Become a smarter investor with CNBC Pro.
Get stock picks, analyst calls, exclusive interviews and access to CNBC TV.
Sign up to start a free trial today