Stocks fell on Friday as a weak jobs report dashed optimism that the economy was emerging from a soft patch, leaving investors to hope earnings season would revive an appetite for buying.
The sell-off was broad and halted an eight-day streak for the Nasdaq, though stocks ended off their lows. U.S. employers added only 18,000 workers in June, short of even the lowest forecast, jolting buyers who had rushed into the market after some encouraging labor-market figures earlier in the week.
Despite the day's drop, the three major U.S. stock indexes ended higher for the week. The market is coming off a string of gains that reflected increased hope for an economic rebound and a strong earnings season.
If you're going to get concerned about the jobs report, you should wait for earnings before going through a complete manic swoon, said Phil Dow, director of equity strategy at Minneapolis-based RBC Wealth Management, which oversees $164 billion.
Our guess is that we'll see better-than-expected earnings and revenue, and combined with the valuation of the market, this is a compelling time to get in.
The S&P 500 components are expected to show earnings growth of an average of 7.3 percent in the second quarter, but estimates have been lowered in the last 30 days.
The Dow Jones industrial average <.DJI> slipped 62.29 points, or 0.49 percent, to 12,657.20 at the close. The Standard & Poor's 500 Index <.SPX> shed 9.42 points, or 0.70 percent, to 1,343.80. The Nasdaq Composite Index <.IXIC> dropped 12.85 points, or 0.45 percent, to 2,859.81.
For the week, though, all three major U.S. stock indexes rose: The Dow advanced 0.6 percent, while the S&P 500 rose 0.3 percent and the Nasdaq gained 1.6 percent.
The CBOE Volatility Index <.VIX> or VIX, widely seen as a measure of anxiety on Wall Street, finished the session unchanged at 15.95. The VIX is down 30 percent from a high reached on June 16.
This reflects a lack of investor anxiety, said Natalie Trunow, chief investment officer of equities at Calvert Investment Management in Bethesda, Maryland, which manages about $14.8 billion. Even though the data suggests a soft patch, investors don't see big clouds on the horizon that would prompt them to hedge their positions in a major way.
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Banking stocks also fell, with the S&P's financial index <.GSPF> fell 1.3 percent, pressured by Bank of America
President Barack Obama cited the gloomy jobs report as one more reason lawmakers must strike a deal soon to raise the U.S. debt limit, saying the impasse was fueling uncertainty within financial markets and in the business sector.
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Volume was extremely light, with about 5.95 billion shares traded on the New York Stock Exchange, the American Stock Exchange and Nasdaq, well below last year's daily average of 8.47 billion.
More than two stocks fell for every one that rose on both the New York Stock Exchange and the Nasdaq.
(Reporting by Ryan Vlastelica; Editing by Jan Paschal)