NEW YORK, N.Y. – Stocks ended slightly lower on Wall Street on Friday, giving the market its first weekly decline in a month.
The market edged up in early trading after a much anticipated report on hiring last month showed decent gains. It quickly turned lower and remained down for the rest of the day. Suppliers of basic materials and industrial companies lost the most.
The government reported that employers hired last month at a slower pace than forecast, but not slow enough to signal the economy is in trouble and cause the Federal Reserve to hold off on raising interest rates later this year.
Bonds were little changed on the news. The yield on 10-year Treasury notes slipped to 1.72 per cent from 1.74 per cent.
Real estate and phone companies continued to decline. Once favoured by investors for their relative stability and steady dividends, they have become less attractive at the prospect of higher interest rates. Real estate companies lost 5 per cent during the week, and phone companies slumped 3.8 per cent.
“Everything that everyone had been buying for safety has gone down this week, and it’s gone down big,” said John Fox, chief investment officer of Fenimore Asset Management. “You have an unwinding of the low-rate trade.”
The Dow Jones industrial average fell 28.01 points, or 0.2 per cent, to 18,240.49. The Standard & Poor’s 500 index lost 7.03 points, or 0.3 per cent, to 2,153.74. The Nasdaq composite declined 14.45 points, or 0.3 per cent, to 5,292.40.
Industrial companies were dragged down in part by Honeywell International, which lowered its earnings forecast. The company put out a press release citing lower shipments to aviation equipment makers and delays in its military and space businesses, among other things. Honeywell closed down $8.67, or 7.5 per cent, to $106.94.
The jobs report showed that U.S. employers added 156,000 jobs last month, a decent gain but slightly below market expectations. Jobs growth has averaged 178,000 a month so far this year, down from last year’s pace of 229,000.
Most investors expect the Fed to raise rates in December. It has held them near zero since 2008, a factor that many market watchers cite as a key driver of the seven-year bull run in stocks. Low interest rates make stocks appear relatively appealing compared to low-yielding bonds or CDs. They also make it easier for companies to borrow money to buy back their own stock.
“The world’s largest economy looks to be sailing full steam ahead to a rate hike before the end of the year,” said said Paul Sirani, chief market analyst at Xtrade.
Among stocks making big moves, Tyson Foods plunged $6.63, or 9 per cent, to $67.75 after an analyst predicted a big drop in Tyson because of a lawsuit that accuses it and other companies of manipulating poultry prices.
Gap jumped $3.47, or 15 per cent, to $26.25 after reporting September sales results that showed growth at its Old Navy chain. Other retailers rose, too.
Ruby Tuesday fell 17 cents, or 7 per cent, to $2.34 after the restaurant chain reported a loss in its fiscal first quarter.
In currency markets, the British pound fell as much as 6 per cent in what’s being dubbed a “flash crash,” to its lowest level in more than three decades. It eventually rebounded to $1.2435, down from $1.2605 on Thursday.
Britain’s FTSE 100 rose 0.6 per cent in the wake of the pound’s latest decline. A lower currency potentially makes British exports more competitive as well as boosting the value of foreign earnings when brought back to the U.K.
Germany’s DAX was down 0.7 per cent while the CAC-40 in France fell 0.7 per cent.
U.S. benchmark crude oil fell 63 cents to close at $49.81 a barrel in New York.
Brent crude, the international standard, fell 58 cents to close at $51.93 a barrel in London. Wholesale gasoline fell 2 cents to $1.48 a gallon, heating oil fell 2 cents to $1.58 a gallon and natural gas jumped 14 cents to $3.19 per 1,000 cubic feet.
The price of gold fell $1.10 to $1,251.90 an ounce, silver rose 4 cents to $17.38 an ounce and copper rose less than 1 cent to $2.16 a pound.
The euro rose to $1.1180 while the dollar fell to 103.07 yen.