The Shadow
NEW YORK (AP) – Stocks traded in a tight range on Friday as the market took a relatively weak December jobs report in stride.
Employers cut 85,000 jobs last month, the Labor Department reported, worse than the 8,000 drop analysts expected. However the earlier month’s figures were also revised to show a slight gain in jobs. Stocks indexes initially dipped after the report came out but made up some of their losses and were narrowly mixed at midmorning.
The news reminded investors that the economic recovery is likely to be fitful. Data from the previous two months was revised to show that the economy generated 4,000 jobs in November, the first gain in nearly two years. But the revisions showed a loss of 16,000 more jobs than previously estimated in October.
The report also signals that many jobless people are giving up on their search for work. The unemployment rate was unchanged at 10 percent.
A year ago, when the economy was still reeling from paralyzed credit markets and the collapse of several large banks, the Dow Jones industrial average fell 143 points on news that the unemployment rate had climbed more than expected to 7.2 percent during December 2008. Employers cut 524,000 jobs that month.
Analysts were mixed on whether the report is a sign unemployment will start continue to move higher.
Peter Cardillo, chief market economist at the brokerage Avalon Partners Inc. in New York, said the unemployment data was disappointing, but “it doesn’t change a trend.” He noted many of the job losses were in the construction sector, which is probably due to seasonal slowdowns.
“As you can see, the market isn’t really falling apart,” Cardillo said.
In morning trading, the Dow Jones industrial average fell 25.55, or 0.2 percent, to 10,581.31. The Standard & Poor’s 500 index fell 0.97, or 0.1 percent, to 1,140.72, while the Nasdaq composite index rose 7.08, or 0.3 percent, to 2,307.13.
Mike Rubino, CEO of Rubino Financial Group in Troy, Mich., was slightly more pessimistic about the employment picture, saying the jobless rate would’ve been far worse had the size of the work force not declined by 661,000. That decline showed more people are giving up on even trying to find a new job.
Meanwhile workers finding jobs are getting paid less, which means consumption and consumer spending isn’t likely to improve to pre-recession levels anytime soon, Rubino said.
The “underemployment” rate, which factors in discouraged workers and part-time workers who would prefer full-time jobs, rose last month, climbing to 17.3 percent from 17.2 percent in November.
Interest rates held in a narrow range on the bond market. The yield on the benchmark 10-year Treasury note, which moves opposite its price, was flat at 3.83 percent compared with late Thursday.
Four stocks fell for every three that rose on the New York Stock Exchange, where volume came to 196.1 million shares, versus 207.6 million traded at the same point Thursday.
In corporate news, UPS Inc. shares rallied after the delivery service company said its fourth-quarter results would top previous estimates. UPS shares rose $2.95, or 5.1 percent, to $60.36.
European markets were mostly lower following the U.S. jobs data. Investors there were also reacting to a report that showed unemployment in the 16 countries that use the euro rose to 10 percent in November for the first time since the single currency was introduced at the start of 1999.
Earlier, Asian stocks rose after upbeat holiday sales figures suggested American consumers were spending more.
The dollar fell slightly. Gold prices fell.
The Russell 2000 index of smaller companies fell 0.02, or less than 0.1 percent, to 641.95.
Overseas, Japan’s Nikkei stock average rose 1.1 percent. Britain’s FTSE 100 fell 0.3 percent. Germany’s DAX index declined 0.4 percent, while France’s CAC-40 rose 0.6 percent.
