U.S. stock market ended a volatile week on a down note

December's employment situation report received a mixed investor reaction

The U.S. stock market ended a volatile week on a down note Friday, 09 January 2015 with traders blaming the slide, in part, on December's jobs report that revealed a drop in wages. Slumping oil prices and headlines about a dual hostage crisis in France added to the negative mood. December's employment situation report received a mixed investor reaction, as the number of jobs added to the economy was strong, however wage growth ticked down.

The main benchmarks finished lower for the week, which has been marked by sharp sell-offs on Monday and Tuesday, then big rallies on Wednesday and Thursday. The Dow Jones Industrial Average moved by triple digits for the fifth session in a row. Friday's losses put the main indexes back into negative territory for the year.

On Friday, the Dow Jones Industrial Average slid by 170.50 points, or 1%, at 17,737.37 ending the week 3.5% lower. The Nasdaq Composite finished down 32.12 points, or 0.7%, to 4,704.07, recording a 0.5% loss for the week. The S&P 500 closed 17.33 points, or 0.8%, lower at 2,044.81, and ended the week with a 0.7% loss.

Financials and consumer-discretionary stocks led the losses on Friday, while all 10 sectors ended lower. Energy stocks lost 3.6% for the week, as oil prices continued to fall.

Arguably the most important U.S. economic data point of the month came in close to market expectations, as the key non-farm payrolls number of the December employment report was up 252,000. The market place expected non-farm jobs to have risen by 240,000 workers. But hourly wages declined and more Americans dropped out of the labor force, suggesting the economy may not be shifting into a higher gear. Market said decelerating wage growth may keep the Federal Reserve from raising rates sooner. The unemployment rate fell to 5.6% in December from 5.8% in November (consensus 5.7%), but that resulted from a large decline in labor force. Average hourly wages in December contracted 0.2% after increasing a downwardly revised 0.2% (from 0.4%) in November.

Separately, Wholesale inventories increased 0.8% in November after increasing an upwardly revised 0.6% (from 0.4%) in October while the consensus expected an increase of 0.3% Durable wholesale inventories increased 0.8% in November, up from a 0.1% increase in October. Large gains in professional equipment (1.3%), machinery (0.9%), and automotive (0.6%) offset declines in lumber (-0.5%) and furniture (-0.3%).

Nondurable wholesale inventories increased 0.7% in November, down from a 1.5% increase in October. Low oil prices pushed petroleum inventories down 3.7%. That loss was more-than-offset by a 5.7% increase in farm product inventories.

A feature in the market place late this week is the marked increase in investor and trader risk appetite, evidenced by the big rebounds in world stock markets after strong selling pressure seen earlier this week. The European Union got another very low inflation reading this week, which further raised fears of price deflation. Traders also took note of dovish remarks from a U.S. Federal Reserve official, FOMC voting member Charles Evans, who said the Fed should not raise interest rates in 2015.

In overnight news, China's consumer inflation was reported at up 2% for the year 2014, which is well below the government's inflation target of 3.5%. Asian stock markets were supported on the news, which suggests China's central bank can go easier on its monetary policy initiatives.

Other U.S. economic data out Friday included the monthly wholesale trade report.

Producer prices in December dropped the most in two years. German industrial production unexpectedly fell in November for the first time in three months.

Bullion prices ended little higer at Comex on Friday, 09 January 2015. A U.S. employment report that was close to market expectations had just a slight bullish impact on gold prices. A lower U.S. dollar index on Friday morning was also a slightly bullish outside market force for the precious metals. February Comex gold was last up $6.80 at $1,214.90 an ounce. March Comex silver last traded up $0.02 at $16.40 an ounce.

Crude oil futures fell on Friday, 09 Jnauary 2015 at Nymex extending losses to a seventh week in a row. Prices seesawed for most of Friday, finding early support on the positive U.S. jobs report.

Light, sweet crude for delivery in February lost 43 cents, or 0.9%, to settle at $48.36 a barrel on the New York Mercantile Exchange. Nymex crude had settled higher for the two past trading sessions. On the week, it lost 8.2%. The seven-week string of losses is the longest since a matching streak in November.

Friday's participation was below average with roughly 713 million shares changing hands at the NYSE floor.

Monday's session will be free of economic data.

Powered by Capital Market - Live News