Big day for Fed speakers: Yellen, Fischer and more
U.S. stocks struggled to hold on to slight gains Friday, flipping in and out of negative territory, as investors weighed stronger-than-expected April employment report against uncertainty of the outcome of the French presidential election on Sunday.
Continue Reading Below
The S&P 500 index was up 2 points, or 0.1%, to 2,392, with nine of the 11 main sectors trading in positive territory. Financials and health-care stocks edged lower, energy shares rallied following a rebound in oil prices.
"The jobs reports was indeed solid, but investors are cautious going into the weekend when the French go to polls. Perhaps, because by now people do not have a lot of faith in polls," said JJ Kinahan, chief strategist at TD Ameritrade.
The Dow Jones Industrial Average declined 10 points, or less than 0.1%, to 20,941, with more than 30 points of that drag coming from shares of International Business Machines Corp.(IBM), which plunged 3% following news that Warren Buffett's Berkshire Hathaway sold about one-third of its stake (http://www.marketwatch.com/story/warren-buffett-tells-cnbc-hes-dumped-a-third-of-stake-in-ibm-2017-05-04).
Meanwhile, the Nasdaq Composite Index rose 5 points, or 0.1%, to 6,080.
"This jobs report indicates that the job market remains healthy, underlining that the economy continues to grow at a solid, but not spectacular rate," said Kate Warne, investment strategist at Edward Jones.
Weak wage growth in the jobs report, however, Ian Winer, director of equity trading at Wedbush Securities.
"It is sort of the same theme about a secular change in the economy," Winer said. "Due to technology and automation, wages are not going to grow, and that's a big headwind to [interest] rates growing and you see financials down so the market does not see a lot of 'reflation' going on."
Investors in energy companies were skittish as oil priced remained volatile. Losses for the energy sector weighed on stocks Thursday, as U.S. crude and Brent oil prices both crashed 4.8% due to global supply worries. On Friday, West Texas Intermediate crude rebounded, trading up 1.5% at $46.19 a barrel, pulling back from a 3% dive in Asian trading.
Baker Hughes (BHI) showed on Friday that the number of active U.S. rigs drilling for oil increased by 6 to 703 rigs this week--the 16th straight weekly increase in rigs (http://www.marketwatch.com/story/baker-hughes-data-show-us-oil-rig-count-has-climbed-above-700-2017-05-05), but the crude contract held on to modest gains following the report.
Investors will keep a close eye on the euro this weekend as the French head to the polls on Sunday to participate in the final round of the country's presidential election, where centrist Emmanuel Macron will face off against far-right candidate Marine Le Pen, who has said she would pull the country from out of the European Union, a potentially destabilizing move for markets.
However, Macron is expected to win the election handily, according to recent polls; so a surprise outcome would rattle investors.
Read:Brace for market mayhem if Le Pen unexpectedly wins French presidency (http://www.marketwatch.com/story/brace-for-market-mayhem-if-le-pen-unexpectedly-wins-french-presidency-2017-05-04)
Also read:OPEC faces high-stakes decision as oil wavers around 5-month low (http://www.marketwatch.com/story/opec-faces-high-stakes-decision-as-oil-drops-to-5-month-low-2017-05-04)
The market has already priced in a win for Macron, Winer said, predicting that a LePen win would be a "shock event" and likely send stocks down 2% on Monday.
(http://www.marketwatch.com/story/opec-faces-high-stakes-decision-as-oil-drops-to-5-month-low-2017-05-04)Economy in focus: Hiring rebounded from a wobbly showing in March, offering fresh evidence (http://www.marketwatch.com/story/us-creates-211000-jobs-in-april-as-hiring-rebounds-2017-03-10) the U.S. economy is still growing at healthy clip and paving the way for the Federal Reserve to raise interest rates soon.
The headline number, as well as the 4.4% unemployment rate were above expectations. Wages grew also, but at a slower pace than late last year.
Fed speakers: Fed Vice Chairman Stanley Fischer said at the Hoover Institution monetary policy conference at Stanford University that central bank policy cannot be rules-based (http://www.marketwatch.com/story/feds-fischer-says-central-bank-policy-cannot-be-rules-based-2017-05-05) and that policy makers needed the freedom to depart from guidelines if circumstances warranted.
San Francisco Fed President John Williams said Friday the central bank should change its strategy concerning inflation (http://www.marketwatch.com/story/feds-williams-backs-changing-central-banks-strategy-to-price-level-targeting-2017-05-05), allowing it to run high to make up for periods when it was too low.
Chicago Fed President Charles Evans, Boston Fed President Eric Rosengren and St. Louis Fed President James Bullard are expected to take part in a panel discussion at the conference at 1:30 p.m. Eastern. Finally, Fed Chairwoman Janet Yellen is set to talk about "125 years of women's participation in the economy" at Brown University at 1:30 p.m. Eastern.
Read:Which Fed members to watch in a clutch of appearances on Friday (http://www.marketwatch.com/story/fed-returns-to-pulpit-with-six-speeches-friday-2017-05-04)
Stock movers: Shake Shack Inc.(SHAK) shares surged 6.6% even as the burger chain reported falling same-restaurant sales late Thursday (http://www.marketwatch.com/story/shake-shack-shares-plunge-as-company-sales-growth-slackens-2017-05-04).
Activision Blizzard Inc.(ATVI) shares rose 0.6% after the videogame developer's earnings beat forecasts, but reported fewer users (http://www.marketwatch.com/story/activision-blizzard-beats-quarterly-expectations-but-reports-fewer-users-2017-05-04).
Shares of Zynga Inc.(ZNGA) jumped 9% after earnings from the social-gaming company beat forecasts (http://www.marketwatch.com/story/zynga-jumps-7-after-earnings-beat-2017-05-04).
Chesapeake Energy Corp.(CHK) shares surged 5.7% after analysts provided an upbeat opinion (http://www.marketwatch.com/story/chesapeake-energy-shares-rally-as-analysts-welcome-first-quarter-earnings-2017-05-05) on the energy company following earnings.
Revlon Inc.(REV) shares dropped 22% after the beauty company reported quarterly results (http://www.marketwatch.com/story/revlon-shares-plummet-after-earnings-slide-2017-05-05).
Berkshire Hathaway (BRKA) (BRKA) is due to report after the close. Buffett will meet investors and answer questions at the conglomerate's annual shareholder meeting (http://www.marketwatch.com/story/6-things-to-watch-when-warren-buffett-hosts-berkshires-annual-meeting-2017-05-05) on Saturday. Shares were little changed.
Other markets: Chinese stocks finished 0.7% lower on Friday (http://www.marketwatch.com/story/chinese-stocks-drop-on-falling-commodity-prices-2017-05-04), pressured by worries the country's crackdown on speculators and borrowing could weigh on demand for metals. The most actively traded iron-ore futures contract opened sharply lower on the Dalian Commodity Exchange, after tumbling by the 8% daily limit on Thursday.
European stocks finished at a 21-month high ahead (http://www.marketwatch.com/story/european-stocks-fall-from-21-month-high-ahead-of-us-jobs-french-election-2017-05-05)as investors waited for the French presidential election, which will be decided on Sunday. Investors remain hopeful that centrist Emmanuel Macron (http://www.marketwatch.com/story/emmanuel-macron-5-things-to-know-about-the-man-poised-to-be-frances-president-2017-04-24) will beat far-right Marine Le Pen (http://www.marketwatch.com/story/5-things-you-dont-know-about-marine-le-penfrances-trump-2017-05-04) in that hotly contested race.
And:European equities a buy, but watch for this Trump risk: Eaton Vance (http://www.marketwatch.com/story/european-equities-a-buy-but-trump-policy-inaction-a-risk-eaton-vance-2017-05-03)
Gold slipped 0.1%, while the ICE Dollar Index was also down 0.1% after the jobs report. The yield on the 10-year Treasury note was flat at 2.35%.
(END) Dow Jones Newswires
May 05, 2017 13:29 ET (17:29 GMT)