By Kate Gibson, MarketWatch
NEW YORK (MarketWatch) -- U.S. stocks tallied minuscule gains on
Friday, positioning the Dow industrials and S&P 500 for record
closes, as bonds rallied and the dollar fell after the July jobs
report fell short of forecasts.
"We're pretty flat; some indices are up, some indices are down,
but there is a big reaction in the Treasury market," said Dan
Greenhaus, chief global strategist at BTIG LLC.
Treasurys rallied after the jobs report, sending the yield on
the benchmark 10-year note (10_YEAR) down 9 basis points to
2.621%.
The dollar (DXY) fell against the currencies of major U.S.
trading partners.
The Labor Department reported the economy created 162,000 jobs
in July and the unemployment rate fell to 7.4%. Economists polled
by MarketWatch had forecast growth of 180,000 jobs and some
analysts had grown even more optimistic, calling for a gain of
above 220,000.
"The jobs report was very ho-hum; it didn't really change the
narrative. The only reason people are disappointed is because
expectations were raised so much," said Greenhaus.
In a speech Friday afternoon, St. Louis Federal Reserve
President James Bullard said the central bank needs to see "more
data" before deciding whether to reduce its $85 billion in monthly
bond purchases.
Bullard is a "centrist, so to speak, so for him to say we need
to wait until we get more data is not unimportant information,"
said Greenhaus.
Erasing a 69-point drop, the Dow Jones Industrial Average (DJI)
was lately up 5.86 points, or 0.1%, at 15,633.88, a level that has
it up 0.5% on the week.
The blue-chip index on Thursday hit an all-time intraday high of
15,650.69 and finished at 15,628.02, its 29th record this year.
A day after clearing 1,700 for the first time and ahead 0.9%
from last Friday's close, the S&P 500 index (SPX) climbed
nearly 1 point to 1,707.62. Read: S&P 500 at 1,700 is a yellow
light for Wall Street.
The Nasdaq Composite (RIXF) rose 8.6 points, or 0.2%, to
3,684.31, putting it in line for a 2% weekly gain.
The technology-heavy index on Thursday ended at a more than
13-year high of 3,676.78, nearly 1,400 points from its all-time
closing high of 5,048.62 set on March 10, 2000.
Decliners just outpaced advancers on the New York Stock
Exchange, where 466 million shares traded as of 3:45 p.m. Eastern.
Composite volume cleared 2.6 billion.
Trading in some Treasury futures contracts came to a brief halt
just ahead of Friday's jobs report, after big orders hit,
triggering a five-second pause, the CME Group Inc. confirmed.
Gaining 2.1% for the week, crude-oil futures (CLU3) for
September delivery fell 95 cents, or 0.9%, to $106.94 a barrel;
gold futures for December delivery (GCZ3) fell 70 cents, or 0.1%,
to end at $1,310.50 an ounce, leaving them off 0.9% for the
week.
Fed factors
The jobs data drew varying views on when the Federal Reserve
would start scaling back its $85 billion in monthly bond
purchases.
"Today's report keeps the debate open about the timing of Fed
action to taper the bond-buy program," offered Fred Dickson, chief
investment strategist at Davidson Companies.
The year-to-date private-sector job-growth average of 196,000 is
near the 200,000 level spoken about as meeting the criteria for
reducing those bond buys, said Peter Boockvar, chief market analyst
at the Lindsey Group. "We'll see in September," he added.
The soft employment report should lead to "some soul searching
by those who thought and acted as if reducing long-term asset
purchases next month was a done deal," said Marc Chandler, global
head of currency strategy at Brown Brothers Harriman, in emailed
commentary.
"We still think these guys are itching to reduce asset
purchases, probably not by much, maybe $10 billion just to do
something," said Greenhaus.
At the same time the jobs report was released, the Commerce
Department said consumer spending rose 0.5% in June and personal
income was up 0.3%.
Another economic report had factory orders rising 1.5% and
shipments falling 0.4% in June.
Movers: Dell, AIG
Shares of computer maker Dell Inc. (DELL) advanced 5.4% after
founder Michael Dell and Silver Lake, which are looking to take the
company private, agreed to raise their offer and add a special
dividend in exchange for a change in voting rules.
American International Group Inc. (AIG) rose 2.5% after the
insurer said late Thursday that it'll pay a dividend for the first
time since 2008 and its bottom line beat Wall Street forecasts.
LinkedIn Corp. (LNKD) jumped 11% after the company posted
better-than-expected second-quarter results after Thursday's
closing bell.
Shares of Bank of America Corp. (BAC) slid 0.8% after the lender
disclosed that the Justice Department may sue the bank over jumbo
prime securitizations.
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