- Markets turn broadly positive after shock jobs report
- Non-farm payrolls rise by 74,000 in December (November: 241,000)
- Alcoa falls after quarterly results; retailers in focus
Dow Jones: -0.05%
S&P 500: 0.45%
US markets rallied in afternoon trading on Friday with the Dow Jones erasing losses to finish flat and the S&P 500
ending with gains as investors continued to react to the surprise plunge in non-farm payrolls in December.
Nevertheless, it was a choppy session for Wall Street indices as investors attempted to gauge what impact last month's jobs report would have on the future of Federal Reserve monetary policy.
Analysts are hoping that the woeful data may prompt the US central bank to hold off from accelerating the rate of tapering at its next meeting later this month.
"This number probably doesn't change the direction of travel too much with respect to tapering but it certainly slows it down. What this does mean is that we probably won't see any further tapering until March," said Michael Hewson, Chief Market Analyst at CMC Markets.
US jobs shock
US non-farm payrolls increased by just 74,000 in December, according to the Bureau of Labor Statistics, significantly lower than the 241,000 gain in November, with poor weather conditions largely to blame. While the previous two months' gains were revised higher by a combined 38,000, December's data came as a real shock to analysts who had expected a reading closer to 193,000.
The focus has now turned to the Fed ahead of its policy meeting later this month, following December's decision to scale back its quantitative easing programme.
The unemployment rate unexpectedly declined from 7% to 6.7%, but the participation rate fell from 63% to 62.8%. This was the lowest level of participation in over three decades and is a cause for concern among economists as people continue to leave the labour force.
"The participation rate is a major factor when measuring the rate of unemployment - such a low participation rate has taken the shine off the unexpected drop in unemployment," said David Madden, Market Analyst at IG.
"Now that the dust is settling investors are viewing the jobs numbers for what they are - weak. Quantitative easing may be proving to be less effective, but we are a long way from the next round of tapering."
Alcoa kicks off earnings season poorly
Results from aluminium producer Alcoa - regarded as the unofficial beginning to the new quarterly earnings season - failed to impress investors after the closing bell on Thursday night, with the stock falling sharply this morning after profits missed analysts' estimates.
Fashion retailer Gap gained after the group said it expects full-year profits to reach the upper end of its guidance, while Abercrombie & Fitch rallied after raising its annual earnings prediction. Jewellery firm Tiffany & Co also rose after holiday sales rose.
In contrast, retail peer Sears sunk sharply as investors reacted to a significant fall in same-store sales over Christmas and worse-than-estimated guidance.
Software group Microsoft performed well after analysts at Barclays raised their rating on the stock from 'neutral' to 'overweight'.
S&P 500 - Risers
Abercrombie & Fitch Co. (ANF) $37.19 +11.98%
Ventas Inc. (VTR) $60.70 +4.58%
HCP Inc. (HCP) $38.87 +3.90%
Family Dollar Stores Inc. (FDO) $67.48 +3.86%
Newfield Exploration Co (NFX) $25.69 +3.71%
W.W. Grainger Inc. (GWW) $263.71 +3.62%
Constellation Brands Inc. Class A (STZ) $80.05 +3.36%
Carnival Corp. (CCL) $41.25 +3.23%
Juniper Networks Inc. (JNPR) $23.54 +3.11%
Harman International Industries Inc. (HAR) $88.28 +2.81%
S&P 500 - Fallers
Alcoa Inc. (AA) $10.11 -5.43%
J.C. Penney Co. Inc. (JCP) $7.34 -3.93%
Teradata Corp. (TDC) $44.31 -2.38%
Humana Inc. (HUM) $96.96 -2.05%
Chevron Corp. (CVX) $121.01 -1.85%
Tiffany & Co. (TIF) $90.36 -1.79%
Western Union Co. (WU) $16.77 -1.70%
Whirlpool Corp. (WHR) $156.64 -1.49%
DaVita HealthCare Partners Inc (DVA) $64.74 -1.37%
Bank Of New York Mellon Corp. (BK) $34.23 -1.35%
Dow Jones I.A - Risers
Coca-Cola Co. (KO) $40.13 +1.01%
Caterpillar Inc. (CAT) $90.51 +0.89%
Exxon Mobil Corp. (XOM) $100.52 +0.76%
Merck & Co. Inc. (MRK) $49.88 +0.73%
Walt Disney Co. (DIS) $75.39 +0.65%
Goldman Sachs Group Inc. (GS) $178.39 +0.56%
Home Depot Inc. (HD) $82.01 +0.54%
Verizon Communications Inc. (VZ) $47.75 +0.53%
McDonald's Corp. (MCD) $95.80 +0.36%
AT&T Inc. (T) $33.62 +0.24%
Dow Jones I.A - Fallers
Chevron Corp. (CVX) $121.01 -1.85%
Unitedhealth Group Inc. (UNH) $74.70 -1.81%
General Electric Co. (GE) $26.96 -0.96%
Pfizer Inc. (PFE) $30.69 -0.78%
E.I. du Pont de Nemours and Co. (DD) $63.54 -0.63%
JP Morgan Chase & Co. (JPM) $58.49 -0.46%
American Express Co. (AXP) $88.55 -0.37%
Visa Inc. (V) $221.13 -0.35%
Nike Inc. (NKE) $76.92 -0.22%
Travelers Company Inc. (TRV) $87.49 -0.22%