Stocks ended lower Friday, after the Dow briefly topped the 29,000 milestone, with investor euphoria over recent record highs deflated by data showing slower-than-expected U.S. jobs and wage growth in December.
How did the benchmarks perform?
The Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA +1.22% lost 133.13 points, or 0.5%, to end at 28,823.77, while the S&P 500 index /zigman2/quotes/210599714/realtime SPX +1.45% fell 9.35 points, or 0.3%, to close at 3,265.35. The Nasdaq Composite Index closed down 24.57 points, or 0.3%, at 9,178.86.
All three major benchmarks indexes set new intraday highs Friday and the main indexes all posted gains for the week despite Friday’s weak close. The Dow saw a 0.7% weekly advance, while the S&P 500 rose 0.9% and the Nasdaq gained 1.8%.
On Thursday, the Dow gained 211.81 points, or 0.7%, to close at 28,956.90, while the S&P 500 index rose 21.65 points, or 0.7%, to 3,274.70. The Nasdaq Composite Index added 74.18 points to finish at 9,203.43, a gain of 0.8%.
What’s was driving the market?
The U.S. Labor Department said the U.S. economy added 145,000 new jobs in December, below the 165,000 expected by economists and less than the 266,000 gain in the prior month The unemployment rate, meanwhile, held near a 50-year low at 3.5%.
“While disappointing on the headline, today’s payroll miss is unlikely to change the outlook for the U.S. economy as the results are consistent with economic output chugging along at trend pace,” said Charlie Ripley, senior investment strategist for Allianz Investment Management. “Overall, today’s report is a precursor to what we can expect in 2020, an economy extending the current expansion at a moderate pace.”
However, growth in average hourly earnings came in below expectations, rising 0.1% from December, versus a 0.3% expected by economists. Revisions to prior months’ estimates were also negative, with October gains revised down from 156,000 jobs to 152,000 jobs and the November increase from 266,000 to 256,000.
“A miss is a miss, and the downward revisions to November and October’s figures are disappointing. But at this stage of the economic cycle, the U.S. is still enjoying an impressively strong pace of job growth,” said Ulas Akincilar, head of trading at online trading platform INFINOX.
“Of greater concern is the slowing pace of wage growth — which slipped to 2.9% in 2019 as a whole — and could steadily become a brake on the wider U.S. economy,” he said.
Investors were also digesting an announcement by the Trump administration of fresh economic sanctions on Iran, following an attack on U.S. military facilities in Iraq that was in retaliation for the killing of a top Iranian general by U.S. forces last week. The sanctions target eight “senior Iranian regime officials” as well as the nation’s steel, aluminum, copper and iron industries, according to the Treasury Department .
Meanwhile, a Chinese delegation is expected to arrive in Washington on Monday to complete a phase-one trade agreement with the U.S., which has arguably been the most influential driver of stock moves for more than a year. President Donald Trump said he wants a partial trade deal signed by Jan. 15 or shortly thereafter.