US close: S&P 500 ends the week flat as jobs report weighs

Wall Street finished the week on a slightly down note following the release of a much weaker than expected monthly US Jobs report that some economists said put paid to any hopes that the central bank might hike rates in June or July.

The Dow Jones Industrial Average dipped 0.18% or 31.50 points to 17,807.06, the S&P 500 declined 0.29% or 6.13 points to 2.099.13 - to end the week essentially flat - and the Nasdaq lost 0.58% or 28.85 points to finish the day at 4,942.52.

Life insurers and banks were the worst performing industry groups, with the Philadelphia/KBW gauge of lenders´ shares dropping 2.25% to 69.79, alongside an outsized ten basis point drop in the yield on the benchmark 10-year US Treasury note to 1.70%.

The best performing industry groups were: Gold (9.41%), Platinum&precious metals (8.01%) and Mining (7.84%) as the US dollar spot index slumped 1.61% to 94.03 and gold futures jumped 3%.

Utilities were also strong performers, gaining 1.64%.

The US added 38,000 jobs in May, well below the 160,000 that economists had expected, the Labor Department revealed. It marked the weakest non-farm payrolls report since September 2010 and compared to a downwardly revised 123,000 jobs in April.

The unemployment rate fell to 4.7% in May from 5.0% in April, beating estimates of 4.9%, but only due to a jump in part-time hiring and a shrinking labour force.

“We see this report as taking a June rate hike off the table and likely does the same for July since, in our view, FOMC members will likely want to see at least two months of evidence that hiring has rebounded before moving to another rate hike,” Barclays´s Michael Gapen said in a research report sent to clients.

Adding to the downbeat mood on Wall Street, the Institute for Supply Management´s non-manufacturin purchasing managers´ index fell from 55.7 in April to 52.9 for May (consensus: 55.3), pointing to a notable slowdown in service sector activity and hiring.

Front month West Texas Intermediate crude oil futures retreated by 42 cents to $48.62 per barrel on NYMEX following the release of the weekly Baker Hughes US oil rig count, which at 325 revealed nine more rigs than a week before – for their second increase over the last three weeks.

Earlier on Friday, Federal Reserve Bank of Chicago President Charles Evans said the US economy continues to be affected by downside risks.

“I see the value in making small and gradual adjustments to the fed-funds rate as the data improve and confirm my positive baseline outlook for the US,” he said.

The Fed was due to next meet to decide on policy on 16-17 June.

More positively, US factory orders rose the most in six months in April, according to the Commerce Department. New orders for manufactured goods jumped 1.9% year-on-year in April, ahead of forecasts for a 1.8% increase and following a 1.5% gain in March.

In company news, shares in retailer GAP advanced despite the company saying late on Thursday that sales in May fell 5%, while same-store sales dropped 6%.

Talen Energy Corp. gained following news the independent power producer has agreed to be bought by private investment company Riverstone Holdings.

Twitter Inc. and Yahoo were under the cosh following reports that executives from the companies met to discuss a possible merger several weeks ago.

As of Friday´s close, markets were assigning odds of 31.3% to the possibility of a 25 basis point interest rate hike by the time of the Federal Reserve´s 27 July policy meeting, according to the Chicago Mercantile Exchange´s Fed Watch tool.

S&P 500 - Risers
Newmont Mining Corp. (NEM) $35.40 +9.43%
Broadcom Limited (AVGO) $162.56 +4.94%
Freeport-McMoRan Inc (FCX) $11.11 +4.22%
Gap Inc. (GPS) $19.09 +4.15%
Mosaic Company (MOS) $26.70 +4.09%
Textron Inc. (TXT) $39.96 +3.77%
AES Corp. (AES) $11.22 +3.51%
United States Steel Corp. (X) $15.28 +2.76%
Welltower Inc (HCN) $71.32 +2.66%
Sempra Energy (SRE) $109.46 +2.56%

S&P 500 - Fallers
Baxalta Incorporated (BXLT) $0.00 -100.00%
Charles Schwab Corp. (SCHW) $29.22 -5.25%
E*TRADE Financial Corp. (ETFC) $26.69 -5.12%
Signet Jewelers Ltd (SIG) $88.19 -4.38%
Chesapeake Energy Corp. (CHK) $4.09 -3.76%
Lincoln National Corp. (LNC) $44.43 -3.52%
Robert Half International Inc. (RHI) $40.45 -3.48%
Bank of America Corp. (BAC) $14.42 -3.48%
Citigroup Inc. (C) $45.39 -3.36%
Marathon Petroleum Corporation (MPC) $35.46 -3.33%

Dow Jones I.A - Risers
Caterpillar Inc. (CAT) $75.04 +1.93%
E.I. du Pont de Nemours and Co. (DD) $68.78 +1.00%
Coca-Cola Co. (KO) $45.04 +0.72%
Procter & Gamble Co. (PG) $82.47 +0.63%
Unitedhealth Group Inc. (UNH) $136.84 +0.59%
Boeing Co. (BA) $127.38 +0.42%
Verizon Communications Inc. (VZ) $50.92 +0.30%
Johnson & Johnson (JNJ) $114.76 +0.24%
Apple Inc. (AAPL) $97.92 +0.20%
3M Co. (MMM) $168.38 +0.20%

Dow Jones I.A - Fallers
Goldman Sachs Group Inc. (GS) $155.67 -2.27%
Nike Inc. (NKE) $53.45 -1.98%
JP Morgan Chase & Co. (JPM) $64.64 -1.78%
American Express Co. (AXP) $65.49 -1.39%
Microsoft Corp. (MSFT) $51.79 -1.31%
Pfizer Inc. (PFE) $34.69 -0.52%
Home Depot Inc. (HD) $131.74 -0.51%
Intel Corp. (INTC) $31.62 -0.44%
International Business Machines Corp. (IBM) $152.89 -0.40%
General Electric Co. (GE) $29.94 -0.37%

Nasdaq 100 - Risers
Broadcom Limited (AVGO) $162.56 +4.94%
Liberty Global plc Series A (LBTYA) $38.92 +1.28%
Dish Network Corp. (DISH) $54.30 +1.15%
T-Mobile Us, Inc. (TMUS) $43.63 +1.02%
Liberty Global plc Series C (LBTYK) $37.51 +0.91%
Priceline Group Inc (PCLN) $1,301.71 +0.91%
Endo International Plc (ENDP) $17.59 +0.86%
Xilinx Inc. (XLNX) $47.41 +0.62%
Kraft Heinz Co. (KHC) $85.30 +0.61%
Skyworks Solutions Inc. (SWKS) $66.94 +0.54%

Nasdaq 100 - Fallers
Incyte Corp. (INCY) $84.96 -3.14%
JD.com, Inc. (JD) $22.98 -2.87%
American Airlines Group (AAL) $30.81 -2.72%
Akamai Technologies Inc. (AKAM) $53.55 -2.46%
PACCAR Inc. (PCAR) $54.90 -2.40%
Activision Blizzard Inc. (ATVI) $37.81 -2.27%
Cognizant Technology Solutions Corp. (CTSH) $60.12 -1.99%
Vertex Pharmaceuticals Inc. (VRTX) $93.96 -1.94%
Micron Technology Inc. (MU) $12.86 -1.91%