US close: S&P skids to worst start to a year ever in 2016

On Friday the S&P 500 finished the first four trading days of 2016 with a fall of 4.9%, the worst start to a year ever recorded, despite the release of what most analysts appeared to agree was a better than expected reading on non-farm payrolls, although a reading on wage growth disappointed, and a small bounce overnight in Chinese stocks.

In the last trading session of the week, the Dow Jones Industrial Average retreated 1.02% and surrendered another 168 points, while the Nasdaq Composite dropped 0.97% and the S&P 500 another 1.09%.

Treasuries clocked in with their best weekly showing since 2011 while oil futures were left nursing a weekly loss of approximately 10%.

Most market commentary referenced jitters about the situation in China as the main culprit behind price action on Wall Street, although in remarks to Bloomberg TV after the release of the employment data Janus Capital's Bill Gross sounded a skeptical note on the likelihood of further Fed easing in 2016.

The non-farm payrolls report showed US employers added 292,000 jobs in December, smashing estimates of 200,000. The prints for the previous two months were revised higher by a combined 50,000.

A gauge of unemployment held at 5% last month, as expected.

However, average hourly earnings rose less than anticipated. Earnings grew 2.5% year-on-year in December, below forecasts for a 2.7% increase. On a month-on-month comparison, wages registered zero growth, missing estimates for a 0.2% gain.

"Don't fret over the zero hourly earnings number; it is due to a well-established calendar quirk, which depresses reported wages in months - like Dec - when the 15th (payday for people paid semi-monthly) falls outside the survey week. We continue to expect the next hike in March, with the Fed likely to raise rates by 150bp over the course of this year as wage gains accelerate beyond their comfort point," Pantheon Macroeconomics said in a research report.

Analysts at Barclays said Friday's job figures suggested labour market momentum remained "firmly" in place.

Nonetheless, “trends in private consumption growth and other components of domestic demand bear further watching, particularly if labor markets were to slow in the months ahead or if the headwinds from abroad were to intensify substantially," analysts Michael Gapen, Rob Martin and Jesse Hurwitz said in a research note sent to clients.

Meanwhile, Chinese stocks recovered from Thursday’s losses after regulators ended the “circuit breaker rule” and the People’s Bank of China set the daily yuan rate higher.

After a short-lived spike following the release of the jobs numbers, oil futures promptly resumed their slide lower - extending their losing streak to a seventh consecutive session.

Front month Brent crude futures finished 0.9% lower at $33.826 per barrel and West Texas Intermediate down 0.97% to $32.84 per barrel on the ICE.

The dollar was up against all the major currencies, rising 0.03% against the euro to 1.0924.

To take note of, so-called 'short interest' in S&P 500 stocks was at 3%, its highest since October 2011, Bloomberg reported.

In company news, Apple bounced back slightly following reports earlier in the week that iPhone 6S and 6S Plus production levels are being cut due to low demand.

FedEx Corp also managed to close in the green after EU regulators approved its takeover of TNT Express.

Gap Inc. declined after the clothing retailer reported December sales fell 5% compared to last year.

The worst performing sectors were: Platinum (-4.58%), Apparel retailers (-4.58%) and Gold (-4.20%).

US Treasury notes gained, with the yield on the benchmark two-year note ending the day two basis points lower to 0.93% and that on the 10-year note declining by three basis points to 2.12%.

Yields move inversely to prices.

S&P 500 - Risers

Range Resources Corp. (RRC) $25.75 +6.85%
CONSOL Energy Inc. (CNX) $7.69 +5.78%
Viacom Inc. Class B (VIAB) $40.98 +5.37%
EQT Corp. (EQT) $54.45 +4.97%
Cabot Oil & Gas Corp. (COG) $17.20 +3.74%
Scripps Network Interactive Inc. (SNI) $53.56 +2.70%
CBS Corp. (CBS) $46.46 +2.47%
Equinix, Inc. (EQIX) $309.79 +2.14%
Discovery Communications Inc. Class A (DISCA) $26.01 +2.08%
FirstEnergy Corp. (FE) $31.59 +1.90%

S&P 500 - Fallers
Gap Inc. (GPS) $22.91 -14.32%
Fossil Group Inc (FOSL) $29.91 -6.74%
Kohls Corp. (KSS) $47.88 -5.86%
Seagate Technology Plc (STX) $32.54 -5.79%
Valero Energy Corp. (VLO) $68.26 -5.31%
Tesoro Corp. (TSO) $101.62 -5.05%
Signet Jewelers Ltd (SIG) $126.93 -4.76%
Hanesbrands Inc. (HBI) $29.00 -4.73%
Nordstrom Inc. (JWN) $46.24 -4.66%
Endo International Plc (ENDP) $53.78 -4.58%

Dow Jones I.A - Risers
Apple Inc. (AAPL) $96.96 +0.53%
Microsoft Corp. (MSFT) $52.33 +0.31%

Dow Jones I.A - Fallers
Cisco Systems Inc. (CSCO) $24.78 -2.48%
Wal-Mart Stores Inc. (WMT) $63.54 -2.29%
Boeing Co. (BA) $129.99 -2.27%
JP Morgan Chase & Co. (JPM) $58.92 -2.24%
Exxon Mobil Corp. (XOM) $74.69 -2.02%
General Electric Co. (GE) $28.45 -1.79%
Unitedhealth Group Inc. (UNH) $110.16 -1.72%
Merck & Co. Inc. (MRK) $51.08 -1.69%
Nike Inc. (NKE) $58.87 -1.64%
United Technologies Corp. (UTX) $90.40 -1.63%

Nasdaq 100 - Risers
Viacom Inc. Class B (VIAB) $40.98 +5.37%
Vodafone Group Plc ADS (VOD) $32.54 +2.88%
Discovery Communications Inc. Class C (DISCK) $25.00 +2.80%
Discovery Communications Inc. Class A (DISCA) $26.01 +2.08%
Cerner Corp. (CERN) $58.74 +1.86%
Yahoo! Inc. (YHOO) $30.63 +1.56%
Electronic Arts Inc. (EA) $63.13 +1.07%
Charter Communications Inc. (CHTR) $174.89 +0.73%
Apple Inc. (AAPL) $96.96 +0.53%
Verisk Analytics Inc. (VRSK) $73.37 +0.45%

Nasdaq 100 - Fallers
Seagate Technology Plc (STX) $32.54 -5.79%
Mylan Inc. (MYL) $49.42 -4.24%
Western Digital Corp. (WDC) $55.39 -4.22%
Wynn Resorts Ltd. (WYNN) $57.74 -4.07%
Garmin Ltd. (GRMN) $33.55 -3.87%
Vertex Pharmaceuticals Inc. (VRTX) $110.71 -3.70%
Alexion Pharmaceuticals Inc. (ALXN) $168.13 -3.58%
Staples Inc. (SPLS) $9.51 -3.26%
Ross Stores Inc. (ROST) $52.10 -3.09%
Netflix Inc. (NFLX) $111.39 -2.77%