US Stocks Finish the Week Higher 12/02 15:51
Investors made a small move back to safer assets Friday afternoon after the
government's November jobs report showed continued hiring, but weak wages.
NEW YORK (AP) -- Investors made a small move back to safer assets Friday
afternoon after the government's November jobs report showed continued hiring,
but weak wages.
Indexes finished little changed as real estate and household goods companies
rose, but banks, which have soared since the presidential election, took losses.
Most stocks finished higher, and the biggest gains went to companies that
pay big dividends, similar to bonds. Investors also bought bonds, and prices
rose and yields fell.
The dollar also weakened as investors expected less inflation. Thanks to a
loss from Goldman Sachs, which closed at a nine-year high on Thursday, the Dow
Jones industrial average dipped after closing at a record high a day ago.
The jobs report called into question some of investors' hopes about the
state of the economy, and they reversed some of the moves they've made since
the presidential election three weeks ago.
"It suggests that inflationary pressures maybe aren't building as quickly,
at least one the wage side, as some had supposed," said Russ Koesterich, head
of asset allocation for BlackRock's Global Allocation Fund. He said investors
want to see a combination of strong wage growth and stimulus spending to boost
the economy in 2017. The weak wage figures throw that into doubt.
"You're less likely to see inflation build if people aren't getting paid
more because they can't afford to spend more," said Koesterich.
The Dow lost 21.51 points, or 0.1 percent, to 19,170.42. The Standard &
Poor's 500 index rose 0.87 points to 2,191.95. The Nasdaq composite added 4.55
points, or 0.1 percent, to 5,255.65.
The weak finish appeared to mark an end, at least for now, of the
post-election rally for U.S. stocks. The S&P 500 and Nasdaq fell this week
after a three-week rally took them to record highs. The Dow finished little
The Labor Department said U.S. employers added 178,000 jobs in November as
hiring remained steady. Investors have long expected that the Federal Reserve
will raise interest rates later this month, and the jobs report did nothing to
dispel that notion. But fewer people looked for work and hourly wages slipped.
Bond prices, which have been falling sharply since the presidential
election, rose. The yield on the 10-year Treasury note fell to 2.30 percent
from 2.45 percent.
Lower bond yields pushed investors to buy utility and real estate companies
and consumer goods makers, which are often compared to bonds because of their
big dividend payments. When bond yields fall, those stocks become more
appealing to investors seeking income. General Growth Properties rose 62 cents,
or 2.5 percent, to $25.46 and Exelon rose 84 cents, or 2.6 percent, to $33.01.
PepsiCo climbed $1.57, or 1.6 percent, to $100.60.
The drop in bond yields also affected banks because yields are linked to
long-term interest rates. Lower interest rates mean banks can't make as much
money from lending. Goldman Sachs fell $3.27, or 1.4 percent, to $223.36 and
Citigroup gave up $1.25, or 2.2 percent, to $56.02.
The financial sector of the S&P 500 is the highest it's been since 2008, up
13 percent since the presidential election.
Benchmark U.S. crude added 62 cents, or 1.2 percent, to $51.68 a barrel in
New York. Brent crude, the standard for pricing international oils, picked up
52 cents, or 1 percent, to $54.46 a barrel in London. The price of oil surged
12 percent this week after OPEC countries agreed to trim the production of oil
next year. That was the biggest weekly rise in oil prices since February 2011.
The dollar fell to 113.67 yen. The euro rose to $1.0660 from $1.0645.
Starbucks shares slid $1.30, or 2.2 percent, to $57.21 after the coffee
chain said Howard Schultz will step down as CEO in April. He will remain
chairman, and Starbucks said he will focus on new ideas like high-end shops.
President and Chief Operating Officer Kevin Johnson will become CEO. Schultz
gave up the CEO title in 2000, and investors feel Starbucks struggled until he
became CEO again in 2008.
Human resources software company Workday gave a weak forecast. CEO Aneel
Bhusri said some customers have recently delayed completing large deals, partly
because of "global uncertainties such as Brexit, the U.S. presidential
election, and pending elections in other G8 countries." Workday's stock tumbled
$10.20, or 12.5 percent, to $71.40.
Gold rose $8.40 to $1,177.80 an ounce. Silver jumped 33 cents, or 2 percent,
to $16.83 an ounce. Copper lost 2 cents to $2.63 a pound.
In other energy trading, wholesale gasoline picked up 1 cent to $1.56 a
gallon. Heating oil added 1 cent to $1.66 a gallon. Natural gas lost 7 cents,
or 2 percent, to $3.44 per 1,000 cubic feet.
The CAC-40 in France fell 0.7 percent and the FTSE 100 index in Britain
finished 0.3 percent lower. Germany's DAX fell 0.2 percent. The Nikkei 225
index in Japan shed 0.5 percent and South Korea's Kospi lost 0.7 percent. Hong
Kong's Hang Seng retreated 1.4 percent.