Stocks slumped on Friday as bullish analyst comments on tech companies failed to rally a market preoccupied with a weaker-than-expected report on U.S. job growth in December.
The Dow Jones industrial average fell 18.92 points, or 0.18%, to 10,603.96. The broader Standard & Poor's 500 index eased 1.70 points, or 0.14%, to 1,186.19. The Nasdaq composite index was down 1.39 points, or 0.07%, to 2,088.61.
Looking ahead, next week kicks off the fourth quarter earnings reporting season with aluminum giant and Dow component Alcoa (AA) expected to release its performance report on Monday. Among some of the other highlights, chip giant Intel (INTC) reports on Tuesday and Apple Computer (AAPL) releases results on Wednesday, followed by Sun Microsystems (SUNW), the server maker, on Thursday.
The economics report flow will also be heavy next week. Topping the list is a reading on Friday on wholesale inflation in December. That number is seen increasing only 0.1% for the month vs. a 0.5% increase in the previous month. Excluding volatile food and energy prices, the gauge is seen ticking up 0.2%, the same amount as in November.
In other economics news next week, investors will get a reading of wholesale sales in November on Monday. That figure is expected to increase only 0.7% vs. a 1.6% boost in October. December retail sales are due out on Thursday. They are seen inreasing 0.4% excluding auto sales vs. a 1.6% rise in the previous month.
On Friday morning, the closely watched nonfarm payroll figures sent mixed signals, as results came in modestly lower than expected. Earlier figures were revised upwards. December nonfarm payrolls rose 157,000, when analysts were expecting a jump of 175,000. However, the November increase of 137,000 was revised up from the original figure of 112,000, and October's figure was also revised upward, to 312,000 from 303,000. The U.S. unemployment rate stayed the same at 5.4%.
According to S&P Marketscope, nothing in the data significantly changes the outlook for the economy or the Federal Reserve. But slack job growth can raise fears about the strength of the U.S. economy.
Meanwhile, Nymex oil prices remain above $45 per barrel, with concerns that global growth will slow amid the lagged impact of elevated fuel costs.
Keeping the Nasdaq from bigger losses were tech shares, which were helped by some bullish comments by analysts. First Albany Capital raised its estimates on Apple, citing growing momentum in sales of iPod digital music devices.
And Goldman Sachs raised its rating on web company VeriSign (VRSN) citing strong growth prospects after a recent acquisition.
In corporate news, Taser International (TASR), maker of electrically charged stun guns, was under pressure Friday after announcing that the U.S. Securities and Exchange Commission has launched an informal inquiry into the company. The probe is focusing on company statements about the safety of its products and sales to a distributor. Its stock fell 15%.
The Wall Street Journal reported that Sprint (FON) and Virgin Group have approached investment banks about selling a state in their U.S. wireless joint venture, Virgin Mobile USA, in an initial public offering. The companies have not yet made a final decision on the deal, according to the paper. Sprint's stock price fell 1.3%.
After the bell Thursday, Accenture (ACN) reported a higher-than-expected first-quarter net profit, thanks to strong growth in consulting. The consulting giant's 13 percent net profit increase exceeded analyst's expectations. Accenture's stock gained 4.8%.
Morgan Stanley raised its rating on transportation stocks FedEx (FDX) and United Parcel Service (UPS) to overweight from equal weight.
Treasuries closed mostly lower after the jobs report. The yield on the benchmark 10-year note was higher at 4.27%.
Bullish comments from Treasury Secretary John Snow projecting firm GDP and reiterating support for a strong dollar boosted the dollar, which had been trading lower in early morning. The euro was trading at $1.306.
European stock markets closed higher Friday.
In London, the Financial Times-Stock Exchange 100 index gained 29.80 points, or 0.62%, to close at 4,854.10.
Germany's DAX index gained 15.46 points, or 0.36%, to close at 4,316.40.
In Paris, the CAC 40 index gained 21.48 points, or 0.56%, to close at 3,877.96.
Asian markets closed lower Friday on caution ahead of the U.S. jobs report. Japan's Nikkei 225 index fell 59.02 points, or 0.51%, to close at 11,433.24. Japanese financial markets will be closed Monday, Jan. 10, for a national holiday
Hong Kong's Hang Seng index fell 137.18 points, or 1%, to close at 13,574.86, pressured by a selloff in blue chips and Macau-related stocks.