By Kate Gibson, MarketWatch
NEW YORK (MarketWatch) -- U.S. stocks finished little changed
Friday, but with the Dow Jones Industrial Average halting a
four-week losing streak, as Wall Street's attention shifted from
developments related to Syria to the impact of the jobs report on
U.S. monetary policy.
Halting its longest winning streak since the middle of July, the
Dow Jones Industrial Average (DJI) ended the session off 14.98
points, or 0.1%, at 14,922.50.
Up 0.8% from last Friday's close, the benchmark had risen 52
points in opening trade and then fallen as many as 148 points,
before recovering midmorning and rising as much as 72 points during
the afternoon.
"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 attended 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 selloff in emerging markets and people going into
Treasuries."
Tallying a weekly gain of 1.4%, the S&P 500 index (SPX) held
steady at 1,655.17, with utilities pacing sector gains and consumer
discretionary falling the most.
The Nasdaq Composite (RIXF) climbed 1.23 points to 3,660.01,
leaving it 2% ahead for the week.
Stock-index futures had extended their gains, setting up stocks
for a higher open, after a disappointing payrolls report shifted
expectations of when the Federal Reserve could start to reduce its
bond buys.
Ahead of the open, the Labor Department reported the economy
added 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.
Investors now think there's a "chance that the Fed does not pull
money off the table in the next meeting," said Gaffney. "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."
While the market generally holds the view that the Federal Open
Marketing Committee would begin curbing its monetary support at its
next gathering on Sept. 17-18, Gaffney believes there's a good
possibility such a move would not come until December.
Fed Bank of Chicago President Charles Evans 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.
Later in the session, Kansas City Fed President Esther George
suggested the central bank could slow its bond-purchase program to
$70 billion.
"Considering she (George) is the most outspoken critic of
quantitative easing, we have to assume then that the overall dovish
Fed may only cut by $10 billion, a whopping 11% drop I say
sarcastically," emailed Peter Boockvar, chief market strategist at
the Lindsey Group.
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 $13.50, or 1%, to $1,386.50 an ounce,
with the precious metal finishing 0.7% down on the week. 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 6 basis points at 2.931% as
Treasurys rallied after the report.
Oil prices (CLV3) rose $2.16, or 2%, to $110.53 a barrel on the
New York Mercantile Exchange, with crude gaining 2.7% from the
prior week's close.
Among movers, ETrade Financial Corp. (ETFCD) rallied 4.6% after
Goldman Sachs upgraded its shares to buy from neutral, with
analysts anticipating the brokerage would benefit as interest rates
rise.
For every two stocks slipping, nearly three rose on the New York
Stock Exchange, where almost 672 million shares traded.
Composite volume exceeded 3 billion.
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