Stocks choppy after jobs report

NEW YORK (CNNMoney.com) -- Blue chips rose Friday afternoon and the broader market struggled after a choppy morning, as investors welcomed a mostly upbeat November jobs report and geared up for an expected interest rate cut from the Federal Reserve.

The Dow Jones industrial average (Charts) added 0.2 percent with around 30 minutes left in the session. The broader S&P 500 (Charts) index and the tech-fueled Nasdaq (Charts) composite were both little changed.

Despite a seemingly upbeat report, stocks showed little momentum throughout the session.

"I think people are relieved by the report, but not ecstatic," said Brett Hammond, chief investment strategist at financial services firm TIAA-CREF. "You got better news than expected and that's positive, but it's balanced against hopes for a 50 basis point cut from the Fed."

Employers added 94,000 jobs to their payrolls in November, following an upwardly revised 170,000 gain in October. The unemployment rate held steady at 4.7 percent, instead of rising to 4.8 percent as expected. Average hourly earnings rose 0.5 percent after rising 0.1 percent in October. Analysts, on average, thought it would rise 0.3 percent.

The report seemed to suggest the economy is holding up despite the challenges of the mortgage and housing market crisis. The jump in average hourly earnings could be seen as inflationary, which stock investors don't like, but could also be seen as a good sign for consumer spending as the holiday shopping period rolls on.

"The report is more of a confirmation than anything new," said Douglas Roberts, chief investment strategist at ChannelCapitalResearch.com, referring to recent readings on weekly jobless claims and the ADP reading on private sector employment released Wednesday.

Roberts said that any stock advance was limited by the recent run up and the anticipation about the Fed.

The Fed's policy committee, meeting Tuesday, is widely expected to cut the fed funds rate, a key short-term lending rate, by a quarter-percentage point, or 25 basis points to 4.25 percent, after cutting rates at the last two meetings. Of late, some Wall Streeters have been hoping for a cut of a half-percentage point, or 50 basis points. There are 100 basis points in one percentage point.

Both analysts said that the November jobs report is the latest in a string of recent reports that suggests the Fed may not need to cut rates by the larger amount, a slight disappointment to stock investors.

Treasury prices slumped, boosting the yield on the 10-year to 4.12 percent from 4.00 percent late Thursday. Treasury prices and yields move in opposite directions.

A separate report, the University of Michigan's consumer sentiment index, fell to 74.5 in early December from 76.1 in late November. Economists thought it would fall to 75.0.

The tech-heavy Nasdaq composite slipped, after component Palm (Charts) issued a profit warning. Gemstar-TV Guide (Charts) slumped 13 percent and was the Nasdaq's most-actively traded issue after agreeing to be bought by Macrovision (Charts) for $2.8 billion.

Among other movers, American Express (Charts, Fortune 500), Capital One Financial (Charts, Fortune 500) and Discover (Charts) all slipped on Merrill Lynch downgrades.

Amgen (Charts, Fortune 500) slipped 4 percent in active Nasdaq trade on worries about the prospect of stricter safety labeling for its anemia drug.

Market breadth was mixed. On the New York Stock Exchange, winners beat losers by a small amount on volume of 940 million shares. On the Nasdaq, decliners topped advancers by a narrow margin on volume of 1.64 billion shares.

Stocks had rallied Thursday, gaining for a second consecutive session, as investors welcomed the White House's plan to help troubled homeowners and geared up for Friday's jobs report and next week's Fed policy meeting.

U.S. light crude oil for January delivery fell $1.95 to $88.28 a barrel on the New York Mercantile Exchange.

COMEX gold for February delivery fell $6.90 to $800.20 an ounce.