Stocks barely budge despite jump in job creation

admin Contributor
Font Size:

NEW YORK (AP) — The best jobs report in five months wasn’t enough to energize the stock market Friday. The Dow Jones industrial average barely budged as a five-day rally that brought the index to a pre-crisis high appeared to be petering out.

A poor profit report made Kraft Foods Inc. the worst-performing member of the 30 stocks that make up the Dow average. The huge food company said net income fell more than 8 percent last quarter as it spent more to promote its brands. Bank of America Corp. and JPMorgan Chase & Co. rose sharply, bringing other financial shares along with them, on news that big banks may soon be able to raise their dividends.

The Dow Jones industrial average waffled between slight gains and losses early Friday, and was down 27.24, or 0.2 percent, in early afternoon trading.

The broader Standard & Poor’s 500 index edged up 0.33, or 0.03 percent, to 1,221.39, and the Nasdaq composite index slipped 6.84, or 0.3 percent, to 2,570.50.

Treasury yields inched higher as investors trimmed their holdings of defensive investments. The yield on the 10-year note rose to 2.53 percent from 2.47 percent late Thursday. The dollar rose against other currencies, and commodities prices edged higher.

Stocks had been rallying this week as investors cheered a long-anticipated $600 billion economic stimulus program that the Federal Reserve announced on Wednesday. The details of the plan were slightly more than many were expecting, and helped lead the Dow to a 220-point charge on Thursday. That brought the Dow to a level last seen in early September 2008, just before the peak of the financial crisis.

Those gains were a distant memory Friday, even though the Labor Department’s report delivered the best news on jobs the market has seen in five months. Employers added a total of 151,000 jobs in October, the first gain since May and far more than analysts had been expecting.

The payrolls gain was tempered by news that the national unemployment rate, which is measured by a separate survey of households, remained stuck at 9.6 percent for the third straight month. The economy needs to consistently add at least 100,000 new jobs a month just to keep up with the expansion of the population. In September, employers cut 95,000 jobs.

Unemployment has remained stubbornly high, just below 10 percent, despite the official end of the recession in June of 2009 and other bright spots in the economy, including gains in manufacturing and retail spending. That high jobless rate has helped delay a rebound in the housing market and frustrated investors, everyday Americans and policymakers in Washington.

Speaking shortly after the jobs report came out, President Barack Obama said he was “open to any idea, any proposal” to help jump-start the economy. Obama, whose Democrat party lost the House of Representatives in mid-term elections on Tuesday, said the country can’t afford two more years of partisan gridlock in Washington.

In other corporate news, Starbucks Corp. jumped 4.2 percent after reporting late Thursday that its earnings doubled last quarter. The world’s largest coffee chain also raised its target for profits next year. Kraft fell 2.8 percent after its disappointing earnings report.

Fluor Corp. jumped 11 percent after the engineering and construction company said revenue and new awards rose. Coventry Health Care Inc. rose 5.2 percent after the health insurer said its income more than doubled in the last quarter and raised its full-year profit forecast.

Overseas markets were mostly higher. Britain’s FT-SE edged up 0.1 percent, Germany’s DAX rose 0.3 percent and France’s CAC-40 was flat.

Japan’s Nikkei 225 jumped 2.9 percent after that country’s central bank outlined details of its own program to stimulate its economy by buying up debt securities.