Wall Street Caps Wild Week on Muted Note

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Wall Street capped the final trading day before the Independence Day holiday slightly lower after traders digested the June jobs report, which showed the U.S. economy added fewer jobs than expected for the month.

The Dow Jones Industrial Average closed 27 points lower, or 0.16% to 17730. The S&P 500 shed 0.64 of a point, or 0.03% to 2076, while the Nasdaq Composite ended the session 3 points lower, or 0.08% to 5009.

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Traders in the U.S. temporarily put worries over Greece and a potential deal with its creditors on the back burner as they turned focus to the June non-farm payrolls report which showed the economy added 223,000 jobs for the month, lower than the 230,000 jobs forecast.

Meanwhile, the unemployment rate fell to 5.3% from 5.5% in May, while the labor force participation rate also saw a drop to 62.6% from 62.9%. Average hourly wages, a closely watched metric by both the Federal Reserve and Wall Street, were unchanged from $24.95 in May. However, on a year-over-year basis, wages have seen a 2% increase.

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The jobs gain in June was slower than the 280,000 pick-up in jobs the economy saw in May. The report’s release a day early is due to the Independence Day holiday-shortened week. U.S. financial markets will be closed on Friday.

“The drop in the unemployment rate is great; no one isn’t happy about that,” Peter Kenny, chief market strategist at ClearPool Group said. “But the bottom line is it was a mixed report…the headline is great, but not convincingly positive. That said, it’s very indicative of the fact that the market will expect a move by the Fed certainly this year. It appears as though sooner rather than later.”

The Federal Reserve has insisted for months it will keep a close eye on data in the U.S. before it decides to move ahead with the first interest rate increase from historic lows after the Great Recession. Kenny said though not stellar, the report, which shows another month of steady job creation is likely to keep the central bank on pace for a September or December rate hike.

Kenny also added the report helped set up for a muted day on the Street.

“This is the last day before a long weekend, the quarter just began, there’s been a lot of volatility and cross currents. I look to see volatility recede today. I don’t’ think the jobs report does anything but confirm current prices. If anything, this jobs report, though it had the potential to move the market dramatically, won’t inform the market in terms of direction and volatility,” he said.

Barclays chief U.S. economist Michael Gapen added in a note Thursday, the report is not likely to significantly alter the Fed’s timeline for rates.

“FOMC Committee members are likely to view the drop in the unemployment rate and underemployment rate as partly due to statistical noise and point to flat earnings as indicative of labor market slack,” Gapen wrote.

He said the view at Barclays still calls for the first rate hike in September.

“Though lingering uncertainty about the strength of the incoming data and developments in the external environment could cause the Fed to delay the rate-hike cycle,” he noted.

While attention continues to shift away from escalating problems overseas in Greece, Michael Block, chief strategist at the Rhino Trading Group, advised not letting it stray too far to the periphery – the referendum on Sunday could snap Wall Street’s focus back overseas.

“I still think the Fed cares more about Greek turmoil and bond market volatility as the gate to tightening than about marginal increases in numbers like (the jobs report), but that’s what has made and will make a market,” Block said.

The June jobs report wasn’t the only data on the economic horizon for the U.S. Thursday. Traders also got an update on weekly jobless claims, which rose to 281,000 from an unrevised 271,000 the week prior. Expectations were for a drop to 270,000.

Factory orders, meanwhile, saw a 1% drop in May, a steeper decline than the 0.5% fall Wall Street expected.

In corporate news, Centene Corporation (CNC) will buy Health Net (HNT) in an approximately $6.8 billion cash-stock-deal that includes about $500 million of debt.

Intel (INTC) also announced on Thursday its president, Renee James, will step down from her role at the company in order to pursue an external CEO position. Intel said James will stay on until January in order to transition her duties to her successor, who has yet to be named.

In commodities, U.S. crude prices settled down 0.72% at $56.55 per barrel, while Brent crude also lost momentum, settling 0.27%  down to $61.84 per barrel. Gold fell 0.26% to $1,166 per troy ounce.

Over in Europe, the Euro Stoxx 50, which tracks large-cap stocks in the eurozone, fell 0.84% to 3466. Meanwhile, the German Dax slid 0.64%  to 11109, the French CAC 40 fell 0.96% % to 4836, and the UK’s FTSE 100 rose 0.40 % to 6635.

In Asia, the Shanghai Composite, which fell into bear-market territory this week, dropped 3.48% to 3912. Hong Kong’s Hang Seng fell 0.68% to 8003, while Japan’s Nikkei saw a 0.95% tick higher to 20522.

In currencies, the euro rose 0.31% against the U.S. dollar.