By Anora Mahmudova and Sara Sjolin, MarketWatch
iShares Nasdaq Biotechnology ETF sinks 1.3%
U.S. stocks edged higher Friday, rebounding after an earlier
decline, as investors grappled with a disappointing jobs report and
its ramifications for the monetary policy.
The main indexes were set to book their second consecutive
weekly losses, however, as poor economic reports have raised
concerns about domestic growth.
Companies scaled back hiring in April, adding just 160,000 new
jobs
(http://www.marketwatch.com/story/us-gains-160000-jobs-in-april-2016-05-06),
while the unemployment rate remained unchanged at 5%. Economists
polled by MarketWatch expected a gain of 203,000. Labor
participation rate fell for the first time in seven months, as more
people dropped out of the labor force.
The weaker-than-expected jobs number sparked speculation that
the Federal Reserve is likely to stay its hand at raising interest
rates over the coming months.
The S&P 500 rose 6 points, or 0.3%, to 2,057. Eight of the
10 main sectors traded higher. Materials stocks led the gains,
while utilities and health-care stocks sold off. At session lows,
the large-cap benchmark has briefly erased its year-to-date
gains.
"Jobs report is a lagging indicator and because all other
economic indicators pointed to a slowdown in the economy, the bad
number was already priced in," said Randy Frederick, managing
director of Trading & Derivatives at Schwab Center for
Financial Research.
The Dow Jones Industrial Average was up 76 points, or 0.4%, to
17,737. Meanwhile, the Nasdaq Composite added 15 points, or 0.3% to
4,732, with biotechnology shares weighing on the index. The iShares
Nasdaq Biotechnology ETF (IBB) was down 1.9%.
"On the one hand, this jobs reports shows the Fed will not be
able to raise rates until the end of the year, because of what's
going on overseas and upcoming presidential elections in the U.S.
The Fed might just raise rates one more time in December to save
face, like it did last year," said Chris Gaffney, president at
EverBank World Markets.
"Yet, the slowdown in hiring and tepid wage inflation also means
that it's not good for consumers, who ultimately drive companies'
revenues and profits," Gaffney said.
Edward Jones's market strategist Kate Warne said the jobs report
carried an ambiguous message.
"It was decent enough to show the economy is still adding jobs,
but weak enough to swing expectations of a rate hike further out.
We expect more volatility over the coming months but still think
fundamentals warrant a grind higher," she said.
Stocks to watch: Shares of Endo International PLC(ENL.T) plunged
35% after the firm cut its outlook.
Shares of GoPro Inc.(GPRO) slumped 5% trade after the
wearable-camera maker said late Thursday it swung to a deep loss in
the first quarter
(http://www.marketwatch.com/story/gopro-swings-to-deep-loss-2016-05-05-16485589).
Herbalife Ltd.(HLF) jumped 13% after the nutritional-products
company's quarterly results beat analysts' expectations
(http://www.marketwatch.com/story/herbalife-jumps-as-first-quarter-results-beat-wall-streets-expectations-2016-05-05).
Yelp Inc.(YELP) rallied 19% after the online-review company late
Thursday raised its revenue forecast
(http://www.marketwatch.com/story/yelp-raises-annual-revenue-guidance-2016-05-05-17485630)
for the year following better-than-expected results.
FireEye Inc.(FEYE) shares tumbled 18% after the security
software company posted a wider loss, cut its sales view for the
year and named a new chief executive officer
(http://www.marketwatch.com/story/david-dewalt-out-as-fireeye-ceo-kevin-mandia-to-take-over-2016-05-05).
Shares of Cigna Corp.(CI) fell 1.8% trade even as the
health-care provider boosted its outlook for the year
(http://www.marketwatch.com/story/cigna-beats-profit-view-raises-outlook-2016-05-06)
and beat Wall Street's earnings expectations.
Apple Inc.(AAPL) and German business software group SAP SE
(SAP.XE) (SAP.XE) said Thursday they will team up on developing
workplace apps
(http://www.wsj.com/articles/apple-sap-to-cooperate-on-workplace-apps-1462474372).
Apple shares were down 0.8%.
Other markets: Oil prices continued their rally on Friday
(http://www.marketwatch.com/story/oil-prices-dip-as-focus-returns-to-global-supply-glut-2016-05-06),
trading above $45 a barrel after settling firmly higher on Thursday
(http://www.marketwatch.com/story/oil-prices-rise-as-canadian-wildfire-threatens-output-2016-05-05)
as a wildfire in Canada's oil-sands district and fighting in Libya
threatened production in those countries. Forest fires continued to
rage in Canada on
(http://www.marketwatch.com/story/canada-wildfires-continue-to-rage-in-oil-rich-alberta-2016-05-06)Friday,
shifting further south.
Stocks in Asia closed mostly lower
(http://www.marketwatch.com/story/asian-stocks-head-toward-ninth-straight-week-of-losses-2016-05-05),
as the uncertainty over the U.S. jobs report kept investors from
taking on more risk.
It was the same story in Europe, where markets were mired and
headed toward weekly losses
(http://www.marketwatch.com/story/european-stocks-pull-back-veering-toward-second-straight-losing-week-2016-05-06).
Gold prices
(http://www.marketwatch.com/story/gold-stocks-step-higher-ahead-of-jobs-report-2016-05-06)
rallied sharply, up 1.7% to $1,294.5 an ounce.
(END) Dow Jones Newswires
May 06, 2016 14:25 ET (18:25 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.