In­vestors seek safety af­ter weak wage data

Drop in bond yields sends big banks — and the Dow Jones In­dus­trial Av­er­age — to a loss.

The Denver Post - - BUSINESS - By Mar­ley Jay

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:

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