Financial Markets: Jobs report can't bolster stocks

Posted

NEW YORK >> The U.S. stock market closed out its worst week since 2011, rattled by concerns over a slowdown in China's economy and plunging oil prices.

Energy stocks were among the biggest decliners again on Friday as the price of oil sank. Crude is trading just below $34 a barrel, its lowest price since early 2004.

A big reason for the plunge in the oil price is concern that China's economy is stumbling. This week the country allowed its currency to weaken against the dollar, an ominous sign that growth there is petering out.

The Dow Jones industrial average lost 167 points, or 1 percent, to 16,346.

The Standard & Poor's 500 index fell 21 points, or 1.1 percent, to 1,922. The Nasdaq gave up 45 points, or 1 percent, to 4,643.

Energy companies fell with the price of oil. Drug stocks also slipped. AbbVie fell $1.28, or 2.2 percent, to $55.93 and Endo International shed $1.99, or 3.5 percent, to $54.37. Utilities traded higher, led by NRG Energy, which picked up 26 cents, or 2.3 percent, to $11.52. Dominion Resources rose $1.24, or 1.8 percent, to $69.75. Telecom stocks edged upward and AT&T rose 25 cents to $33.76.

Economy adds jobs

The Labor Department said U.S. employers added 292,000 jobs in December, far more than economists had forecast. The unemployment rate was unchanged at 5 percent. That's the latest sign the U.S. economy is still growing. On average employers added 284,000 jobs per month in the fourth quarter, the best rate in a year.

Throughout this week, worries about China's economy and shocks to its markets have canceled out positive news from the U.S. and Europe.

Michael Fredericks, portfolio manager for BlackRock Multi-Asset Income Fund, said the labor market is healthy and wages could improve this month.

"These are unusually strong job creation numbers," he said.

Fredericks said the low wage growth and limited inflation will make the Federal Reserve proceed cautiously as it raises interest rates. In December the Fed raised rates for the first time in nine years, but interest rates are still very low.

Oil prices, which have fallen to their lowest prices in more than a decade, also lost ground. U.S. crude fell 11 cents to close at $33.16 a barrel in New York and Brent crude, a benchmark for international oils, declined 20 cents to $33.55 a barrel in London.

Energy stocks took some of the largest losses on the market. Tesoro fell $4.51, or 4.2 percent, to $102.52 and Marathon Oil fell 22 cents, or 2 percent, to $10.44.

Department stores were among the biggest losers on the S&P 500. Their holiday sales have been hurt by the unusually warm winter weather. Kohl's fell $2.83, or 5.6 percent, to $48.03 and Nordstrom gave up $1.77, or 3.6 percent, to $46.73. Macy's lost $1, or 2.7 percent, to $35.89.

Retailer Gap said its sales slumped in December. The totals were worse than analysts expected. The sluggishness included its Old Navy brand, which had been a bright spot for Gap. The stock dropped $3.77, or 14.1 percent, to $22.97. Gap had risen 5.7 percent Thursday.

Stocks in Europe also dipped. The FTSE 100 index of leading British shares declined 0.7 percent while Germany's DAX lost 1.3 percent. The CAC-40 in France slid 1.6 percent.

China's stock market rose to end a tumultuous week. The benchmark index in Shanghai gained 2 percent after a 7-percent plunge on Thursday that led to an early halt in trading. Hong Kong's Hang Seng rose 0.6 percent and South Korea's Kospi added 0.7 percent. Japan's Nikkei 225 lost 0.4 percent.

Worries about China have been driven by a decline in the value of the yuan and disappointing economic data.

The Container Store reported a surprise third-quarter loss and disappointing sales, and its stock plunged $3.11, or 43.4 percent, to $4.07. The company went public in November 2013 with an IPO that priced at $18 per share and it finished its first trading day at $36.20.

Metals mixed

The price of gold fell $9.90, or 0.9 percent, to $1,097.90 an ounce. As the financial crisis and recession fade from memory, gold prices have tumbled to long-time lows. But this was the best week for the metal since the market plunge in mid-August, a sign some investors still buy gold it in times of market upheaval.

Silver declined 42.6 cents, or 3 percent, to $13.918 an ounce. Copper was unchanged at $2.022 a pound.

The euro fell to $1.0904 from $1.0927 and the dollar edged up to 117.68 yen from 117.50 yen late Thursday. Bond prices rose. The yield on the 10-year Treasury note edged down to 2.13 percent from 2.15 percent.


TALK TO US

If you'd like to leave a comment (or a tip or a question) about this story with the editors, please email us. We also welcome letters to the editor for publication; you can do that by filling out our letters form and submitting it to the newsroom.

Powered by Creative Circle Media Solutions