US stocks end higher despite disappointing job report

Consumer discretionary, materials, and technology sectors help equities to rise

US stocks ended higher at Wall Street on Friday, 02 August 2013. Stocks jumped after spending the entire day in a slow climb off its opening lows. The opening slip took place as investors reacted to a weaker-than-expected July jobs report.

The Dow Jones Industrial Average gained 30.34 points, or 0.2%, at 15,658.36. The S&P 500 index climbed 2.80 points, or 0.2%, to 1,709.67. The Nasdaq Composite rose 13.84 points, or 0.4%, to 3,689.59.

Although stocks moved lower initially, the S&P erased almost all of its early losses as participants fell back on the Federal Reserve's pledge to provide support to the markets for as long as economic data continues to paint a lukewarm picture. The recovery effort in equities was assisted by the relative strength of consumer discretionary, materials, and technology sectors.

Latest data at Wall Street showed that nonfarm payrolls added 162,000 jobs after adding a downwardly revised 188,000 (from 195,000) in June. The consensus expected 175,000 new payrolls. The report proved to be a disappointment as not only did payroll growth come in below expectations, but the average workweek dropped to 34.4 hours from 34.5 and average hourly earnings declined 0.1%. Altogether, aggregate wages fell 0.3%, which will put substantial downside pressure on retail sales growth.

Meanwhile, the unemployment rate dropped to 7.4% from June's rate of 7.6%. The consensus expected the unemployment rate to fall to 7.5%. However, the labor participation rate fell to 63.4% from June's 63.5%, causing about half of the decline in the unemployment rate.

Among Friday's remaining data, June personal income increased 0.3% while the consensus expected income levels to increase 0.5%. Separately, spending increased 0.5% in June against the consensus expectation of a 0.4% increase. Data on U.S. factory orders released Friday showed a 1.5% rise in June to a seasonally adjusted annual rate of $496.7 billion. Market was looking for a larger 2.3% growth rate.

In the currency market on Friday, the dollar index, which weighs the strength of the dollar against a basket of six other currencies, fell by 0.3%.

Advancers pulled just ahead of decliners on the New York Stock Exchange, where 676 million shares traded. Composite volume cleared 3.1 billion.

A weaker-than-expected U.S. July jobs report and a fall in the dollar helped bullion prices move up on Friday, 02 August 2013. But prices still marked the first weekly loss in four weeks.

Gold prices clawed back from intraday lows under $1,300 an ounce after July payrolls growth came in short of expectations. Gold for December delivery settled at $1,310.50 an ounce on the Comex division of the New York Mercantile Exchange, down 70 cents, or less than 0.1%, for the session. After initially moving sharply higher after the jobs data, it seesawed between small losses and gains, then closed slightly lower as U.S. equities traded off session lows, drawing some attention away from gold. For the week, gold futures lost 0.9%, their first loss in four weeks.

Silver closed higher, putting an end to three sessions of weakness. The September contract closed up 29 cents, or 1.5%, to $19.91 an ounce 0.7% higher for the week.

Crude oil futures finished lower on Friday, 02 August 2013 as traders gave back some of their optimism over energy demand following data showing weak U.S. job growth in July.

Crude oil for September delivery dropped 95 cents, or 0.9%, to settle at $106.94 a barrel on the New York Mercantile Exchange, after climbing above the $108 level in electronic trading. The loss came after Thursday's hefty rise of 2.7%. Prices notched a climb of 2.1% from last Friday's close.

Indian ADRs ended mixed on Friday. In the IT space, Infosys was down 0.2% and Wipro was up 0.1%. In the Banking space, HDFC Bank was down 1.01% and ICICI Bank was down 3.2%. In other space, Tata Motors was up 0.6%, and Sterlite was up 4.3%.

On Monday, the July ISM Services report will cross the wires at 10:00 ET.

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