Stocks struggle on jobs report
Major gauges caught in a tight range after release of the October employment report; bond prices slump.
NEW YORK (CNNMoney.com) -- Stocks struggled to move higher Friday morning, as investors digested a mostly upbeat October monthly employment report, but continued to show caution at the end of a tough week on Wall Street.
The Dow Jones industrial average (up 26.09 to 12,044.63, Charts), the broader S&P 500 (up 2.61 to 1,369.95, Charts) index and the tech-fueled Nasdaq composite (up 3.00 to 2,337.02, Charts) all struggled to rise about an hour into the session.
Stocks have been under pressure lately, with the Dow sliding for five sessions in a row, in response to a spate of weaker economic reports.
But investors seemed to take comfort in the somewhat mixed October employment report, focusing on the positive aspects.
The unemployment rate fell to 4.4 percent in the month, a five-year low, the Labor Department reported Friday morning. Economists thought it would hold steady at 4.6 percent.
Additionally, the government said that employers added 92,000 jobs to their payrolls in the month, down from an upwardly revised 148,000 in September. Economists were looking for a gain of 125,000.
However, several previous months' readings were revised higher, leaving the overall number of jobs added in 2006 at a higher-than-expected level, perhaps overshadowing the modest October gains.
Average hourly earnings, the report's inflation component, rose 0.4 percent versus forecasts for a rise of 0.3 percent. Earnings rose 0.2 percent in September.
Treasury prices slumped after the jobs report, on bets that the overall strength means the Fed is unlikely to start cutting interest rates early next year. The decline raised the yield on the 10-year note to 4.68 percent from 4.60 percent late Thursday. Bond prices and yields move in opposite directions.
Among stock movers, Whole Foods Market (down $12.41 to $47.71, Charts) slid 20 percent in active Nasdaq trade after warning late Thursday that 2007 sales and earnings growth will slow, due to competition from traditional grocery stores and Wal-Mart (Charts). The forecast overshadowed the company's otherwise upbeat fourth-quarter report.
Qualcomm (up $0.74 to $37.10, Charts) inched higher after reporting fiscal fourth-quarter earnings and sales late Thursday that rose from a year ago and topped estimates. The company also issued a fiscal first-quarter earnings forecasts in a range that sets the midpoint below analysts' average forecast.
In currency trading, the dollar gained versus the euro and the yen.
COMEX gold for December delivery added $1.40 to $629.20 an ounce.