By Anora Mahmudova and Sara Sjolin, MarketWatch
After two days of big drops, then two days of big gains, more
losses
NEW YORK (MarketWatch) -- U.S. stock markets were ending a
volatile week on a cautious note Friday, as investors greeted a
jobs report that showed strong job creation but weak wage growth
with mixed feelings.
The main benchmarks were on track to finish a week marked by
harsh selloffs in the first two days and big rallies over the last
two days roughly where they started it.
The S&P 500 (SPX) fell, losing 8 points, or 0.4%, to 2,054,
as energy and financial stocks led the losses. Nearly all main
sectors were trading lower.
The Dow Jones Industrial Average (DJI) also was lower, down 73
points, or 0.4%, at 17,836 with 23 of its 30 components trading in
negative territory. The Nasdaq Composite (RIXF) was down 12 points,
or 0.3%, at 4,725.
The U.S. economy added 252,000 jobs last month, while
unemployment rate ticked down to 5.6%. However, a drop in wage
growth put a damper on otherwise strong data, indicating the
economy isn't shifting into a higher gear despite the upsurge in
jobs.
Analysts pointed out that a trend of decelerating wage growth
may keep the Federal Reserve from raising rates sooner.
Michael Arone, chief investment strategist for State Street
Global Advisors' U.S. Intermediary Business, said the lack of wage
growth last month puts the Federal Reserve between a rock and a
hard place.
"The headline numbers were great and on surface appear that the
Fed has achieved its unemployment goal, but the lack of wage growth
concerns policy makers, as it means that their other mandate --
inflation -- will continue to stay below target," Arone said.
"Still, I would argue that wage growth is on the horizon and we
may begin to see it next month as 25 states increased their minimum
wages," he added.
Also read: How economists are assessing the jobs report
Friday's cautious trading came after a stellar performance on
Thursday, when the Dow average posted its biggest gain in three
weeks. The surge was spurred by dovish comments from Chicago Fed
President Charles Evans, who argued the Fed shouldn't raise
interest rates until 2016.
On Friday, Evans told CNBC he was still in no hurry to hike
rates in light of the jobs report.
Markets might get more clues on monetary policy later on Friday,
when Richmond Fed President Jeffrey Lacker discusses the 2015
economic outlook at 1:20 p.m. Eastern Time, in Richmond,
Virginia.
ECB news: European stocks were lower, after Bloomberg reported
the ECB's Governing Council was presented with models for buying as
much as 500 billion euros ($592.68 billion) of AAA-rated debt, or
bonds rated at least BBB+.
Movers and shakers:Macy's Inc.(M) fell after the retailer late
Thursday said it aims to save $140 million a year by restructuring
its merchandising and marketing operations. The overhaul is likely
to result in store closures.
Bed Bath & Beyond(BBBY) shares were the worst performers on
the S&P 500, slumping more than 7%, after the retailer said
third-quarter profit fell on higher costs.
Wet Seal Inc.(WTSLA) slumped more than 30% after The Wall Street
Journal reported the teen retailer has hired restructuring lawyers
and cited sources saying a bankruptcy filing could come next
week.
Conatus Pharmaceuticals Inc.(CNAT) slumped 36% after the small
company said it has stopped a clinical trial of a liver drug due to
the "logistical challenges" of following patients with
acute-on-chronic liver failure in the trial.
(Read more about the day's big movers
http://www.marketwatch.com/story/macys-gap-bed-bath-beyond-in-focus-2015-01-09.)
Other markets: Asian markets closed mixed, while European
indexes were mostly lower after a sharp rally on Thursday.
Oil futures swung between small gains and losses, while most
metals prices were on the rise. The dollar declined against most
major currencies.
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