Mixed job report tries to curtail losses at Wall Street

Indices recover from day's losses on Friday to end little higher

With a late turnaround on Friday, 05 February, 2010, US stocks managed to end the week on that day with modest losses. A mixed job report weighed on stocks for the entire day on Friday. On one hand, unemployment rate fell in US but on the other hand, job losses once again increased in the latest month. A strong rally in the earlier part of the week also helped indices at Wall Street keep weekly losses under control.

For the week, that ended on Friday, 05 February 2010, Dow ended lower by 55.1 points (0.5%) at 10,012.23. Nasdaq ended lower by 6.23 points (0.23%) at 2141.12. S&P 500 lost 7.68 points (0.7%) at 1066.19. Eight of ten economic sectors ended in the red led by the financials and utilities sectors. Technology and materials sectors outperformed.

Though stocks pulled off a good rally in the earlier part of the week, concerns regarding European economies regarding their debt payments and also tighter monetary policies across China had sent jitters across world stocks markets during the middle of the week. Wall Street was also no exception.

During the week, earnings reports were generally better-than-expected. Some of the more widely held names that topped estimates were Exxon Mobil, Dow Chemical, UPS, Comcast, Cisco and Visa. A few companies missed however, with Dow component Pfizer coming up short and issuing mixed guidance, while Aetna missed and gave downside guidance.

Separately, retailers announced their latest batch of same-store sales. Though most companies beat, with some topping estimates by a hefty margin, retailers as a whole still fell for the week.

On Friday, 05 February 2010, though Wall Street opened in the green, it was soon pushed lower by a disappointing job report. But with the help of a late rally, that too in the absence of any major catalyst, stocks managed to end with little gains.

On that day, the Dow Jones Industrial Average ended higher by 10 points at 10,012. Nasdaq ended higher by 16 points at 2141. S&P 500 ended higher by 3 points at 1066. Dow was trading lower by 167 points earlier during the day.

Among economic data expected for the day, The Labor Department in US reported on Friday, 05 February 2010, that the unemployment rate in US fell to 9.7% in January 2010 from 10% in December 2009. This marked the lowest unemployment rate since August 2009. The unemployment rate had peaked at 10.1% in October 2009.

On the other hand, nonfarm payroll employment declined again, whereas market had been forecasting a small increase. As per the report, the U.S. economy lost 20,000 nonfarm jobs in January. Market was expecting an addition of around 15,000 jobs in January.

In the technology sector, Apple and Cisco Systems tried to support the Nasdaq and the same was ahead of its counterparts.

In the currency market on Friday, the dollar index, which weighs the strength of dollar against the basket of six other currencies rose by almost 0.4%. The dollar rose to eight month high against the euro on Friday.

Crude oil prices dropped once again on Friday, 05 February 2010. Prices fell as the dollar extended a strong rally on Friday led by mixed job report in US. On Friday, crude-oil futures for light sweet crude for March delivery closed at $71.19/barrel (lower by $1.95 or 2.7%). During intra day trading, prices fell to a low of $69.5. A day earlier, crude had witnessed the biggest percentage drop in six months. For the week, crude ended lower by 2.3%. On a year to date basis, crude is lower by 11.9%.

Precious metals were weak all session on Friday. April gold remained in the red for most of Friday's session, hitting lows of $1044.50 per ounce. It recovered some losses on weakness in the dollar, but still closed 0.9% lower at $1053.20 per ounce. March silver traded in negative territory all session, hitting lows ($14.65 per ounce) around the same time as gold. The precious metal also managed to recover a portion of its losses, but still closed in the red, down 3.5% to $14.83 per ounce.

Indian ADRs ended in the red on Friday with the exception of Infosys. HDFC Bank and ICICI Bank were the largest losers shedding 3.8% and 3.5%. Infosys gained 0.5%.

For the year, Dow, Nasdaq and S&P 500 are lower by 4%, 5.6% and 4.4% respectively. For the next week, earning reports will continue to dominate.