Wall Street flat after jobs data; Syria worries spur caution

NEW YORK Fri Sep 6, 2013 4:38pm EDT

1 of 4. A trader works on the floor of the New York Stock Exchange shortly after the opening of markets in New York, September 4, 2013.

Credit: Reuters/Lucas Jackson

NEW YORK (Reuters) - U.S. stocks closed little changed in choppy trade on Friday after labor market data removed some uncertainty about Federal Reserve policy, but concerns remained about possible military action by the West against Syria.

The U.S. August payrolls report showed about 169,000 jobs were added, fewer than the 180,000 that had been expected, and July's figure was revised sharply lower. The unemployment rate fell to 7.3 percent, its lowest since December 2008, though the decline reflected a drop in the share of working-age Americans who either have a job or are looking for one.

Many analysts said, despite the weak jobs report, the U.S. central bank would not adjust plans to slow its stimulus, known as quantitative easing, currently at $85 billion a month.

Economists at a majority of U.S. primary dealers expect the Fed to announce at a policy meeting less than two weeks away that it will cut its bond purchases, according to a Reuters poll.

Kansas City Fed President Esther George, a consistent hawk who has argued for a tapering of bond purchases all year, said reducing purchases to $70 billion a month could be "an appropriate next step toward normalizing monetary policy."

A cut of around $15 billion would be more in line with current market expectations, which a few months ago priced in a more aggressive reduction.

"I am still a fan of the 'taper lite' - it won't be the initial number that was originally talked about in June, but you still get something," said Stephen Massocca, managing director, Wedbush Equity Management LLC in San Francisco.

"They want to get out of the QE business, they want to start moving to the sidelines. The important thing to point out is that QE was put in place for a really bad economy. It's not a really bad economy."

The Dow Jones industrial average .DJI fell 14.98 points or 0.1 percent, to 14,922.5, the S&P 500 .SPX gained 0.09 points or 0.01 percent, to 1,655.17 and the Nasdaq Composite .IXIC added 1.225 points or 0.03 percent, to 3,660.01.

For the week, the S&P 500 finished up 1.4 percent and the Nasdaq was up 2 percent. The Dow rose 0.8 percent to snap a streak of four weekly declines.

After initially opening higher, major indexes declined, with the S&P 500 down nearly 0.9 percent before rebounding. Indexes then again pared gains in the last hour of trading.

Investors are continuing to assess the possibility of a U.S.-led strike against Syria in retaliation for an alleged chemical weapons attack against its civilians.

Russian President Vladimir Putin made clear on Friday that Russia did not want to be sucked into a war over Syria, signaling that Moscow would maintain support for Damascus in the event of foreign military intervention.

U.S. President Barack Obama said most leaders of the G20 countries agree Syrian President Bashar al-Assad is responsible for using poison gas against civilians as he tried to rally support at home and abroad for a military strike.

Energy prices have been among the most volatile on the issue, with investors concerned that military action in the Middle East will weigh on oil supplies. U.S. crude oil has spiked almost 4 percent over the past two weeks and settled up 2 percent at $110.53 a barrel on Friday. <O/R>

American Tower Corp (AMT.N) rose 4.6 percent to $71.91 after the company agreed to buy Global Tower Partners for $4.8 billion.

E*Trade Financial (ETFC.O) shares jumped 4.6 percent to $16.26 after Goldman Sachs upgraded the brokerage's stock to "buy" from "neutral" two days after the company received approval to use capital from its bank subsidiary for broader corporate purposes.

Volume was light with about 5.84 billion shares traded on the New York Stock Exchange, NYSE MKT and Nasdaq, below the daily average of 6.25 billion.

Advancing stocks outnumbered declining ones on the NYSE by 1,691 to 1,242, while on the Nasdaq, decliners beat advancers 1,210 to 1,298.

(Reporting by Chuck Mikolajczak; Editing by Nick Zieminski)

We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/
Comments (3)
Jake987 wrote:
Hooray. Welcome to Obama’s America. A putrid jobs report send market skyrocketing. Great Job POTUS

Sep 06, 2013 9:23am EDT  --  Report as abuse
Loucleve2 wrote:
stock futures pointed to a higher open…………….for about the first hour.

come on, take off the training wheels, Ben!

Sep 06, 2013 9:29am EDT  --  Report as abuse
gcf1965 wrote:
The sad part that will be glossed over in the jobs report says

“unemployment rate dropped to a four-and-a-half year low as workers gave up the search for work”.

We are supposed to believe things are getting better when reality is people are beginning to realize that there is little or no hope as long as Obama is in the game, and it is a game to him I believe.

Sep 06, 2013 9:50am EDT  --  Report as abuse
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.