Stocks rise as investors dismiss job report
NEW YORK — It was a fluke. That was the conclusion investors reached about the U.S. government’s latest jobs report, which showed a sharp decline in job creation last month. Stock indexes ended mostly higher after wavering for much of the day.
“We need to see more evidence before concluding that all the other [economic] indicators are wrong and the jobs data” are correct, said Kate Warne, a market strategist with Edward Jones.
The Dow Jones industrial average fell 7.71 points, or less than 0.1 percent, to 16,437.05. If not for a slump in Chevron, which reported a decline in fuel production late Thursday, the index would have risen slightly.
The Standard & Poor’s 500 index rose 4.24 points, or 0.2 percent, to 1,842.37 and the Nasdaq composite rose 18.47 points, or 0.4 percent, to 4,174.66.
The Labor Department said that only 74,000 jobs were added to payrolls in December, the least in three years and far fewer than economists expected. The unemployment rate fell, but mostly because many people stopped looking for work, the government said.
“The investor base was completely shocked with how especially weak the numbers were,” said Tom di Galoma, who heads up bond trading at ED&F Man Capital.
Cautious investors took the data as a reason to retreat into safer investments.
Bond prices rose, sending yields lower. The yield on the 10-year Treasury note fell to 2.87 percent from 2.97 percent the day before.
Utility stocks were among the biggest gainers as investors looked to pull back on risk. The Dow Jones utility average, a basket of 15 utility companies, rose 1.3 percent. Consolidated Edison, Pacific Gas & Electric, and Edison International were all up roughly 1 percent or more.
Even gold prices went up, after having a difficult 2013. Gold rose $17.50, or 1.4 percent, to $1,246.90 an ounce on the New York Mercantile Exchange.
“What really needs to come through this year is earnings growth,” said Steve Rees, head U.S. equity strategy for JPMorgan Private Bank.
Very few companies have reported their latest quarterly earnings, but so far the results have not been promising.
Alcoa, the giant aluminum company, said Thursday it had a $2.34 billion fourth-quarter loss due to low aluminum prices. The stock slumped the most in the S&P 500 index, losing 58 cents, or 5.4 percent, to $10.11.
Target dropped after cutting its fourth-quarter earnings forecast, saying a recent data security breach caused customers to shop elsewhere during the holidays. Target fell 72 cents, or 1 percent, to $62.62.