Suhair blog

Stocks waver after mixed unemployment report

NEW YORK – Stocks swung between small gains and losses on Friday after a report said the unemployment rate fell last month but that new jobs remain scarce. The government said the unemployment rate in January dropped to 9 percent, the lowest rate since April 2009 and a sharp fall from 9.4 percent in December. Economists had expected the unemployment rate to rise to 9.5 percent, in part because of harsh winter weather that affected much of the country.

At the same time, the government said that 36,000 new jobs were created last month, the fewest in four months. The slow job growth left some analysts doubting that the economic recovery is gathering momentum.

"We are seeing some improvements but the disappointing jobs creation shows that the job market is not back to where we need it to be," said Ryan Detrick, senior strategist at Schaeffer's Investment Research. The lack of new jobs will likely lead the Federal Reserve to continue its efforts to boost the economy, he said.

Jim O'Sullivan, chief economist at MF Global, said some investors took a skeptical view of the report. "The information value of this report is limited because it was obviously affected by the weather," he said.

The unemployment rate fell even as the economy added few jobs because some people who are out of work gave up looking for a new job, O' Sullivan said. The Labor Department only includes those actively looking for work when calculating the main unemployment rate.

The Dow Jones industrial average rose 8 points, or less than 0.1 percent, to 12,070 in afternoon trading. The Standard & Poor's 500 index rose 1 point, or less than 0.1 percent, to 1,307. The Nasdaq composite index gained 12 points, or 0.4 percent, to 2,765.

"There is nothing in the employment report to hold on to and say that this is giving us direction," said Dan Cook, the chief executive of IG Markets.

Five of the 10 company groups that make up the S&P index fell. Utilities companies had the largest move, losing 0.7 percent.

Bond traders, however, took the employment report as evidence of a stronger job market and drove Treasury prices down and yields up. The yield on the benchmark 10-year Treasury note jumped to 3.65 percent, the highest yield since last May. The yield was trading at 3.55 percent late Thursday.

Before the market opened, health insurer Aetna Inc. said it will raise its dividend payment to shareholders, after its fourth-quarter profit climbed 30 percent. Aetna's stock price jumped 9 percent.

Tyson Foods Inc. rose 6 percent, after profits increased 86 percent last quarter, in part because of rising prices for beef and pork.

Clorox Co. rose 2 percent after it said its quarterly profit was higher than analysts had anticipated.