Stocks end up on job news, but off highs

Dow closes up 54 points, after moving more than 170 points higher. For the week, all three major US indexes fell more than 1 percent.

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    Mathias Roberts (right) of Bank of America Merrill Lynch and William Bott of Barclays Capital work on the floor of the New York Stock Exchange May 6, 2011, in New York. The Dow climbed more than 170 points before closing up 54 points.
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By Abby Schultz and JeeYeon Park, CNBC.com

Stocks closed modestly higher amid falling oil prices and a rising dollar as investors were encouraged by a surprisingly strong report on April jobs growth.

The Dow Jones Industrial Average fell 171.73 points this week, or 1.34 percent to 12,638.81, after rising more than 170 points earlier in the session. On Friday, the Dow gained 54.64 points, or 0.4 percent.

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Kraft was among Dow stocks that led the average higher thanks to stronger-than-expected earnings results delivered after the market closed on Thursday, and price target upgrades by several brokerages. Intel led the handful of blue-chip laggards.

The S&P 500 fell 23.41 points this week or 1.7 percent, to close at 1,340.20. On Friday, the S&P gained 5.10 points, or 0.4 percent. The Nasdaq fell 45.98 points this week, or 1.6 percent, to close at 2,827.56. On Friday the tech-heavy index gained 12.84 points, or 0.5 percent.

The CBOE Volatility Index, widely considered the best gauge of fear in the market, rose 24.54 percent during the week, to 18.37.

The market weakened in mid-afternoon trading as oil prices slipped, dragging energy shares down. The energy sector had let the market higher early in the session.

Stocks may have also trimmed gains because of the dollar, which started the session out weaker, but rose more than 3 percent against the euro for the week.

The euro, under pressure as prospects of a June rate hike by the European Central Bank dimmed, was dealt another blow on Friday after a report in Germany's Spiegel Online that Greece has talked about leaving the euro zone. The report was denied by German officials.

"That could be the most interesting sort of trick in the market’s book," said J.J. Kinahan. "If the dollar were to strengthen, that could throw people for a loop."

A falling dollar has aided stocks, as investors like companies that can benefit from selling their goods at more competitive prices overseas.

Some of the late afternoon weakness can also be attributed to traders wishing to close out their positions before the weekend. "They want to go home without worry," Kinahan said.

Friday's market action, while somewhat volatile, is nothing like the "Flash Crash," when the Dow plunged nearly 1,000 points in minutes. While the new rules that have been implemented since the incident have reduced the severity of future crashes, skeptics still believe that the system has flawsand is vulnerable to individual stock disruptions.

Stocks surged after the market opened after news of a 244,000 jump in nonfarm payrolls for April, a figure that was far above analyst estimates for about a 186,000 gain.

The jump was great news for stocks, says Todd Schoenberger, managing director at LandColt Trading. The best part of the report was that private payrolls gained 268,000 in April, up from 231,000 in March, Schoenberger said.

"It's obvious these jobs are sticky, and not of the temporary, part-time variety," Schoenberger said. (Another View: Dark Side of Jobs Report—Why the Numbers Aren't so Good).

The April report also counters dismal economic news released earlier in the week, including a weak report on service sector growth, as well as a big jump in initial claims for unemployment benefits. Although same store sales data from retailers showed relative strength on Thursday.

Commodity prices started the session out relatively quiet. But then U.S. light crude sank, closing at $97.18 a barrel. For the week, crude fell 14.7 percent, the biggest weekly decline since it began trading opn NYMEX in 1983. Brent crude also slumped Friday, falling to $109.13, a drop of 13.3 percent for the week.

Buyers returned to gold futures , but while spot silver rose on Friday, silver futures slipped. For the week, gold fell 4.2 percent, and silver fell 27.4 percent to $35.283.

On the earnings front, Visa rose slightly after initially slipping Thursday after the credit-card processing firm delivered earnings thatfailed to beat expectations by the wide margins investors were once used to. Wedbush and Susquehanna raised their price target for the Company.

Engineering firm Fluor soared after beating estimates, and reporting a surging backlog of work.

As of today, 437 S&P 500 firms or 87 percent of the index have reported quarterly. (Track all earnings here.) Of the results, 69 percent of the earnings reports have come in above estimates while 19 percent of the earnings have come in below forecasts.

Berkshire Hathaway was expected to release earnings figures after-the-bell tonight.

The earnings season is slowly winding down with just a couple big firms expected to report next week such as Disney, Toyota, Cisco and Macy's.

Elsewhere, Citigroup gained after the financial giant was upgraded to "overweight" from "equal-weight" at Morgan Stanley, ahead undergoing a 1-for-10 reverse stock split on Monday. The move is likely topush the bank's shares above $40 from around $4.55, and curb active trading in its shares.

Sony gained after news CEO Howard Stringer apologized to users of its PlayStation Network for security breaches that compromised their identities. A group of hackers, meanwhile, said they areplanning a third security breach of the network.

Shares of Warner Music Group advanced after news Access Industries won an auction to take control of the company with a bid of $8.25 a share, Reuters reported, citing a person familiar with the matter. Shares were halted after news of the auction came out.

Shares in Europe closed higher after the better-than-expected U.S. jobs data improved investor confidence about the recovery.

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