* Investors eye Q3 earnings next week
* Zynga shares slide after warning, Facebook slips
* Dow up 0.3 pct, S&P off 0.03 pct, but Nasdaq down 0.4 pct
By Angela Moon
NEW YORK, Oct 5 The S&P 500 broke a four-day
string of gains, ending slightly lower on Friday as an
unexpected drop in the U.S. unemployment rate was overshadowed
by concerns about the coming earnings season, which begins with
Alcoa next week.
All three major U.S. stock indexes came off session highs by
afternoon trade, with the S&P 500 turning negative for the first
time this week, as investors braced for weak corporate results.
The Nasdaq was pressured by Apple Inc, which fell
2.1 percent to close at $652.59.
S&P 500 earnings for the third quarter are forecast to have
fallen 2.4 percent from the year-ago period, which would be the
first decline in three years, according to Thomson Reuters data.
"It's a bit 'sell-on-the-news' type of a situation. We had
the big jobs numbers this morning, but traders and investors
don't want to keep their positions going into the weekend and
next week," said Chris Bertelsen, chief investment officer of
Global Financial Private Capital, a Sarasota, Florida-based
wealth manager with $1.5 billion in assets under management.
Despite the lackluster performance for the day, the S&P 500
is still up 16.2 percent so far this year. The benchmark is on
track for its best yearly run since 2009 when stocks rebounded
after the financial crisis.
"On the negative side, the speed with which the market will
get overbought on continued strength may pose a problem," said
Ralph Edwards, director of derivatives strategy at ITG in New
"The market never had a truly ugly day since the highs
registered on September 14th."
Most of the market's gains this year have been prompted by
easy monetary policies. The improvement in U.S. hiring last
month is one bright spot as manufacturing around the world has
been showing signs of softness in recent months.
The Dow Jones industrial average rose 34.79 points,
or 0.26 percent, to 13,610.15 at the close. The Standard &
Poor's 500 Index dipped just 0.47 of a point, or 0.03
percent, to 1,460.93. The Nasdaq Composite Index slipped
13.27 points, or 0.42 percent, to end at 3,136.19.
For the week, the Dow rose 1.3 percent, the S&P 500 advanced
1.4 percent and the Nasdaq added 0.6 percent.
Dow component Alcoa Inc will kick off the earnings
period on Tuesday, when the aluminum company is expected to
report that it broke even, compared with earnings of 15 cents a
share a year ago. Alcoa's stock edged up 0.2 percent to close
at$9.07 on Friday.
Labor Department data showed the U.S. unemployment rate
dropped by 0.3 percentage point in September to 7.8 percent, its
lowest since January 2009. Investors focused on a survey of
households that pointed to a big surge in hiring.
A separate survey of business establishments showed
employers added 114,000 jobs to their payrolls last month while
data for July and August was revised to show 86,000 more jobs
created than previously reported.
Zynga shares plunged 11.9 percent to $2.48 after it
slashed its 2012 outlook for a second time, fanning doubts about
the games maker's ability to shore up its dwindling earnings.
Facebook, which derives more than a tenth of its
revenue from fees paid by Zynga, lost 4.7 percent to $20.91.
Sprint Nextel is considering making a rival bid for
MetroPCS Communications, which agreed on Wednesday to a
merger with Deutsche Telekom's T-Mobile USA,
according to people familiar with the situation.
Sprint Nextel shares rose 2.2 percent to $5.20, while
MetroPCS lost 0.3 percent to $12.65.
About 5.7 billion shares changed hands on the New York Stock
Exchange, Amex and Nasdaq, compared with the average daily
volume of 6.38 billion.