Stock finished mixed on Friday, after soft job growth in May and a tame rise in average hourly earnings fueled speculation the Fed will stop raising interest rates soon, and simultaneously sparked concerns that economic growth is slowing too quickly, says Standard & Poor's Equity Research. Sentiment was also clouded by news that Iran will continue enriching uranium.
On Friday, the Dow Jones industrial average fell 12.41 points, or 0.11%, to 11,247.87. The broader Standard & Poor's 500 index edged up 2.51 points, or 0.2%, to 1,288.22. The tech-heavy Nasdaq composite shed 0.46 point, or 0.02%, to 2,219.41.
Next week, the economic calendar is light, with reports on the trade deficit and import and export prices on Friday.
Investors were weighing a soft jobs report Friday. Nonfarm payrolls rose 75,000 in May, about half the expected increase. Average hourly earnings growth slowed to 0.1% from 0.6%, revised up from 0.5%. The unemployment rate fell to 4.6%.
Futures markets indicated a 50% chance the Fed will hike rates when it meets June 28-29. The odds had risen above 70% in the wake of the May 31 release of the minutes from the most recent Fed meeting. "The U.S. employment report provided the Fed with the unambiguous signal needed for a pause," says Action Economics.
Also on the economic docket, factory orders fell 1.8% in April following a 4.0% surge in March, which was revised lower from 4.2%. Markets expected a somewhat sharper 2.3% decline for the month.
In corporate news, NYSE Group (NYX) rose after the operator of the New York Stock Exchange agreed to buy Euronext, Europe's second-largest bourse, for $9.96 billion.
Pharmaceuticals stalwart Pfizer (PFE) was higher on reports that GlaxoSmithKline (GSK) is planning to bid $15 billion for Pfizer's consumer health business. Colgate-Palmolive (CL) rose on a report that its CEO said the Pfizer business would be a good strategic fit for the right acquisition price.
Silver producer Coeur d'Alene Mines (CDE) was higher after selling its Coeur Silver Valley unit to U.S. Silver Corp. for $15 million in cash.
Video-server systems provider SeaChange International (SEAC) rose sharply after the company posted 5.5% higher first-quarter sales and said it expects "significant revenue growth" throughout fiscal 2007.
Biotech outfit Threshold Pharmaceuticals (THLD) was higher on report an independent monitoring committee recommendeded the phase 3 clinical trial of a cancer treatment be carried out to completion.
Homebuilder Pulte Homes (PHM) dropped after lowering its full-year profit outlook.
In the energy markets Friday, July West Texas Intermediate crude oil futures settled up $1.99 at $72.33 a barrel. Refinery outages, Iran's apparent refusal to end its uranium enrichment program, along with fresh oil worker kidnappings in Nigeria all combined to lift crude to near the week's highs, and gasoline to a nearly one-month peak, reports Action Economics.
European markets were mixed. In London, the Financial Times-Stock Exchange 100 index rose 14.9 points, or 0.26%, to 5,764.6. Germany's DAX index fell 20.55 points, or 0.36%, to 5,687.04. In Paris, the CAC 40 index added 12.41 points, or 0.25%, to 4,959.7.
Asian markets finished higher. Japan's Nikkei 225 index climbed 285.57 points, or 1.84%, to 15,789.31. In Hong Kong, the Hang Seng index rose 267.44 points, or 1.71%, to 15,912.71. Korea's Kospi index added 13.95 points, or 1.08%, to 1,309.04.
Treasury yields plunged as tame May nonfarm payroll job growth and a small rise in average hourly earnings fueled speculation the Fed will pause in its monetary tightening course at the June meeting.
Yields tumbled for all maturities beyond six-month Treasury bills. The 10-year note rallied 26/32 to 100-01/32 for a yield of 4.99% -- below 5.0% for the first time since Apr. 24, supporting expectations of a near-term downtrend, says S&P. The 30-year bond surged 43/32 to 90-29/32 for a yield of 5.01%.