Investors seek safety after weak wage data
Drop in bond yields sends big banks — and the Dow Jones Industrial Average — to a loss.
Investors made a small move back to safer assets Friday afternoon after the government’s November jobs report showed continued hiring, but weak wages.
Most stocks finished higher, and the biggest gains went to companies that pay big dividends, similar to bonds. Investors also bought bonds, and prices rose and yields fell.
The dollar also weakened as investors expected less inflation. Thanks to a loss from Goldman Sachs, which closed at a nineyear high on Thursday, the Dow Jones industrial average dipped after closing at a record high a day ago.
The jobs report called into question some of investors’ hopes about the state of the economy, and they reversed some of the moves they’ve made since the presidential election three weeks ago.
The Dow lost 21.51 points, or 0.1 percent, to 19,170.42. The Standard & Poor’s 500 index rose 0.87 points to 2,191.95. The Nasdaq composite added 4.55 points, or 0.1 percent, to 5,255.65.
The weak finish appeared to mark an end, at least for now, of the post-election rally. The S&P 500 and Nasdaq fell this week after a three-week rally took them to record highs. The Dow finished little changed.
The Labor Department said U.S. employers added 178,000 jobs in November as hiring remained steady. Investors have long expected that the Federal Reserve will raise interest rates later this month, and the jobs report did nothing to dispel that notion. But fewer people looked for work and hourly wages slipped.
Bond prices, which have been falling sharply since the presidential election, rose. The yield on the 10-year Treasury note fell to 2.30 percent from 2.45 percent.
The drop in bond yields also affected banks because yields are linked to longterm interest rates. Lower interest rates mean banks can’t make as much money from lending. Goldman Sachs fell $3.27, or 1.4 percent, to $223.36 and Citigroup gave up $1.25, or 2.2 percent, to $56.02.
Benchmark U.S. crude added 62 cents, or 1.2 percent, to $51.68 a barrel in New York. Brent crude, the standard for pricing international oils, picked up 52 cents, or 1 percent, to $54.46 a barrel in London.
Gasoline price trends
The average price of a gallon of regular unleaded gasoline: