By Kate Gibson, MarketWatch
NEW YORK (MarketWatch) -- U.S. stocks rose modestly on Friday,
with the Dow Jones Industrial Average positioned for its first
weekly rise in five, after a rollercoaster morning as Wall Street's
attention shifted from developments related to Syria to the impact
of the jobs report on U.S. monetary policy.
Extending its longest winning streak since the middle of July,
The Dow Jones Industrial Average was lately up 30.96 points, or
0.2%, at 14,968.44. The benchmark had risen 52 points in opening
trade and then fell as much as 148 points, before recovering
midmorning.
"It's a mixed morning. We've got Syria, the G-20, so we've got a
lot going on. I think you saw money go off the table ahead of the
jobs report, you may see some more of that, with investors not
wanting to have big bets one way or the other going into the
weekend," said Chris Gaffney, senior investment strategist at
EverBank Wealth Management.
Reports indicating intensified rhetoric between Russia and the
United States on Syria's use of chemical gas sent stocks skidding
in early trade. Stocks were hit as Russian President Vladimir Putin
reportedly said his nation already supplies Syria with aid and
weapons and will continue to do so if Syria is attacked.
Stock losses were gradually erased as President Barack Obama
reiterated that the U.S. response would be "limited and
proportional" to the attack in suburban Damascus last month that
killed more than 1,400, including at least 400 children.
Obama spoke from St. Petersburg, where he's been attending the
G-20 summit.
"The market is getting more comfortable with Syria," given the
political assurances that any strike will be strategic with no
American forces on the ground, said Gaffney. He added: "We could
see a spike in oil prices and gold heading up on worries there, and
a sell off in emerging markets and people going into
Treasuries."
The S&P 500 index (SPX) added 4.88 points, or 0.3%, to
1,659.96, with utilities pacing broad sector gains. The Nasdaq
Composite (RIXF) climbed 6.16 points, or 0.2%, to 3,664.92.
Stock-index futures had extended their gains, setting up stocks
for a higher open, after a disappointing payrolls report shifted
expectations of when the Fed could start to reduce its bond
buybacks.
Ahead of the open, the Labor Department reported the economy
added a 169,000 jobs in August, short of forecasts, while cutting
the prior month's estimate. The unemployment rate fell to 7.3% from
7.4% as fewer people looked for work.
Fed Bank of Chicago President on Friday said the central bank
should not cut back on its $85 billion in monthly asset purchases
until economic growth and inflation pick up speed.
Investors now think there's a "chance that the Fed does not pull
money off the table in the next meeting. Most of the market
believed it was going to be a $10 billion cut in the bond-buying
efforts later this month. I think investors still think that, but
are starting to hedge their bets," said Gaffney.
Gold, Treasurys jump
Reduced expectations of an imminent cut to the Fed's bond
purchases also prompted big reversals in other markets. Gold (GCZ3)
shed early losses to rise $13.60, or 1%, to $1,386.60 an ounce. The
dollar (DXY) fell against the currencies of major U.S. trading
partners, including the euro (EURUSD) and the yen (USDJPY).
After rising above 3% overnight, the yield on the 10-year
Treasury note (10_YEAR) was off 10 basis points at 2.903% as
Treasurys rallied after the report.
Oil prices (CLV3) rose $1.71, or 1.6%, to $110.08 a barrel on
the New York Mercantile Exchange.
Among movers, ETrade Financial Corp. (ETFCD) rallied 5% after
Goldman Sachs upgraded its shares to buy from neutral, with
analysts anticipating the brokerage would benefit as interest rates
rise.
For every stock slipping, nearly two rose on the New York Stock
Exchange, where 229 million shares traded by 11:30 a.m.
Eastern.
Composite volume approached 1.2 billion.
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