Stocks finished with small gains on Friday as a higher December-quarter sales forecast from chip bellwether Intel (INTC ) and continued decline in oil prices offset a weak employment report. The dollar tumbled to a record low against the euro on talk that the U.S. won't intervene to stem the continued weakness.
The Dow Jones industrial average rose 7.09 points, or 0.07%, to 10,592.21. The broader Standard & Poor's 500 index was up 0.84 point, or 0.07%, to 1,191.17. The Nasdaq composite index added 4.39 points, or 0.2%, to 2,147.96.
The U.S. dollar fell to fresh lows against the euro to nearly 1.3460 following the employment data. Treasury Secretary Snow said in a TV interview the U.S. supports a strong dollar, and that the competitive market should set foreign exchange rates, reports Action Economics. He reiterated the current account deficit is a shared responsibility with trading partners, needing reduced U.S. deficits, and greater global growth.
In the energy markets, January NYMEX crude settled down 71 cents to $42.54 per barrel, marking the third day of declines. Reports that OPEC would consider cutting output should prices decline further turned the market higher at one point, though technical selling and forecasts of continued mild weather in the U.S. Northeast eased heating fuel supply fears further. Traders expect further crude weakness next week, with the $39 handle now being targeted, says Action Economics.
Next week's economic calendar is not too heavy. It begins with Tuesday's update on third-quarter productivity, which should be revised slightly higher. Wednesday brings crude oil inventories, followed by initial jobless claims, wholesale inventories and sales, and the import and export price index on Thursday. On Friday, the latest on producer prices and the University of Michigan consumer sentiment will be out.
In economic news Friday, U.S. nonfarm payrolls rose 112,000 in November, about half the 200,000 consensus forecast. In addition, October's 337,000 gain was revised down to 303,000, and September's number was revised down to 119,000 from 139,000 new jobs. The unemployment rate fell to 5.4% from 5.5%. Average hourly earnings were up 0.1%, after a 0.3% October gain, while hours worked fell to 33.7 from 33.8.
The payrolls numbers sorely disappointed after talk of a strong set of data, says Action Economics. This helped Treasury yields slide lower, and hammered the dollar. However, it's still a solid report and a rate hike on Dec. 14 is still a certainty, says Action Economics.
"This remains a jobless recovery, although with 2,091,000 jobs added over the last 12 months (an average of 174,000 per month), it's not as jobless as it was for its first two years," wrote David Wyss, chief economist for Standard & Poor's, wrote in an note on Friday.
The Institute for Supply Management's reading on the services sector came in at 61.3, vs. 59.8 in October, better than expected.
Among companies in the news, Intel said in its mid-quarter update issued after the close of trading Thursday that it expects fourth-quarter revenue of $9.3 billion to $9.5 billion, higher than its previous range of $8.6 billion to $9.2 billion, driven by strong worldwide demand for its Intel Architecture products. S&P raised its estimates and price target slightly, but kept a hold recommendation. Intel shares rose about 5% on Friday, and sparked a rise in other semiconductor shares as well.
IBM (IBM ) is putting its personal computing business up for sale in a deal that could be worth as much as $2 billion, according to The New York Times. The stock rose.
Inamed (IMDC ) shares rose after the company says the FDA has granted market approval for Captique Injectable gel -- a dermal filler product based on Genzyme's (GENZ ) non-animal stabilized hyaluronic acid technology -- which will be marketed by Inamed for facial wrinkle correction and as an alternative to Botox.
Treasury prices jumped, causing yields to plunge as much as 15 basis points after the weaker than expected November payrolls result, which was compounded by news that October and September payrolls were revised lower as well, says Action Economics. The 10-year yield started to probe back below 4.40% ahead of the key data was released, then fell and settled at 4.27%.
European stock markets finished lower on Friday. London's Financial Times-Stock Exchange 100 index was down 3.3 points, or 0.07%, to 4,747.9. The November CIPS services index rose to 56.7 from 56.3 in October and U.K. HBOS November house prices fell 0.4%. Vodafone was higher after company said it bought back 15 million shares. GlaxoSmithKline rose as the company seeks to speed development of a cervical cancer vaccine as tougher regulatory scrutiny may delay other experimental drugs.
Germany's DAX index fell 7.53 points, or 0.18%, to 4,208.87, restrained by a report German PMI Services index fell to 51.3 in November from 52.2 in October.
In Paris, the CAC 40 index lost 27.94 points, or 0.73%, to 3,783.51, held back by a report French PMI Services index fell to to 54.0 in November from 54.8 in October.
In Asia, the markets finished mixed on Friday. Japan's Nikkei 225 index gained 101.82 points, or 0.93%, to close at 11,074.89 on the back of falling oil prices and stronger-than-expected Japanese capital spending data. NEC jumped 6.78% after the company it would pay 83.56 billion yen to absorb NEC Soft and NEC System Technologies.
In Hong Kong, the Hang Seng index fell 49.95 points, or 0.35%, to close at 14,211.84 as investors anticipated the key U.S. employment data. CNOOC shares sank after oil prices fell for the second day overnight while Sinotrans plunged on news that UPS would take over most of its international express delivery operations.