Wall Street Retreats After 2-Day Advance
US stocks fell on Friday following a two-day rally as December's jobs report gave a mixed view of the economy, with financial shares leading the way lower.
Reuters | Last Updated: January 10, 2015 11:57 (IST)
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New York: US stocks fell on Friday following a two-day rally as December's jobs report gave a mixed view of the economy, with financial shares leading the way lower.
All three major indices posted slight losses for the week and fell back into negative territory for 2015.
US nonfarm payrolls rose in December, topping Wall Street expectations, but wages unexpectedly fell.
"There was this tale of two cities, with very strong job gains but on the flip side a continued real moderation in wage growth. I think the market looked at that and was sort of confused about what that means," said Burt White, chief investment officer for LPL Financial in Boston.
"I actually think it's the best-case scenario. It showcases the US economy is continuing to grow and repair the labor market, but at the same time, the muted wage growth means the Fed's going to stay lower for longer."
Fourth-quarter results from S&P 500 companies pick up next week, including JPMorgan Chase & Co and Wells Fargo. Both were among the biggest drags Friday, with JPMorgan down 1.7 per cent at $59.34 and Wells Fargo down 1.6 per cent at $52.68. The S&P financial index lost 1.3 per cent, the day's worst-performing major sector.
The Dow Jones industrial average fell 170.5 points, or 0.95 per cent, to 17,737.37, the S&P 500 lost 17.33 points, or 0.84 per cent, to 2,044.81 and the Nasdaq Composite dropped 32.12 points, or 0.68 per cent, to 4,704.07.
Friday's decline followed two days of more than 1 per cent gains for the market, a rally fueled in part by minutes from the last Federal Reserve meeting, which reassured investors the central bank was in no hurry to start raising interest rates.
For the week, the Dow and Nasdaq were down 0.5 per cent, while the S&P 500 lost 0.6 per cent.
Oil prices resumed their slide after two days of relative calm, with Brent and US crude lowest since April 2009 on persistent worry over a supply glut. The S&P energy sector fell 0.8 per cent.
A number of retail shares fell after reporting December sales and providing forecasts. The S&P retail index ended down 1.7 per cent.
Bed, Bath & Beyond dropped 6.7 per cent to $74.09 and was among the S&P 500's biggest percentage decliners after the retailer forecast fourth-quarter earnings at the low end of expectations.
Macy's shares fell 2.8 per cent to $65.92 a day after it said it would close 14 stores and cut some jobs.
About 6.3 billion shares changed hands on US exchanges, below the 7.1 billion average for the last five sessions, according to BATS Global Markets.
NYSE decliners outnumbered advancers 1,916 to 1,139, for a 1.68-to-1 ratio; on the Nasdaq, 1,811 issues fell and 927 advanced, for a 1.95-to-1 ratio.
The S&P 500 posted 43 new 52-week highs and 10 new lows; the Nasdaq Composite recorded 75 new highs and 45 lows.
Copyright @ Thomson Reuters 2015
Story first published on: January 10, 2015 11:01 (IST)