* June jobs creation exceeds forecasts
* Markets gyrate in light post-holiday volume
* Investors worry about Fed cutting back on stimulus
* Dow flat, S&P up 0.2 percent, Nasdaq up 0.2 percent
By Alison Griswold
NEW YORK, July 5 U.S. stocks rose in a seesaw
session on Friday after solid jobs data pointed to a
strengthening economy, but the report also raised the odds the
Federal Reserve will begin to cut its stimulus measures within
the next few months.
Employers added about 195,000 jobs in June, exceeding
expectations of 165,000, and jobs growth in previous months was
revised higher. But the unemployment rate remained unchanged at
Major indexes hit higher levels in early trading but pulled
back and were nearly flat before advancing again. Volume was
Sectors tied to the pace of economic growth and an improved
outlook for lending advanced, including small-cap shares and
"Fear is mounting that the Fed will start tapering in
September on the back of the good employment report," said Andre
Bakhos, director of market analytics at Lek Securities in New
"The intraday move we're seeing is symptomatic of a light
Wall Street attendance where participants are extending the
weekend, and a case of good news is bad news."
The Dow Jones industrial average was up 3.72 points,
or 0.02 percent, at 14,992.27. The Standard & Poor's 500 Index
was up 2.48 points, or 0.15 percent, at 1,617.89. The
Nasdaq Composite Index was up 6.03 points, or 0.18
percent, at 3,449.70.
About 1.8 billion shares had changed hands on U.S. exchanges
as of 11:15 a.m. (1515 GMT), lighter than average.
Interest rates rose sharply on Friday in anticipation that
the Fed will start cutting its monthly bond buying, which was
key factor in stocks' recent gains, as early as September.
Bank of America Corp added 0.8 percent to $12.92
while Citigroup Inc was up 0.5 percent to $47.89. Large
banks benefit when interest rates rise as it increases their net
The S&P small-cap 600 index gained 0.4 percent,
moving within 1 percent of an all-time high.
Annaly Capital Management, a real estate investment
trust geared to mortgage-backed securities, slid 6 percent to
$11.40 as the yield on the benchmark 10-year U.S. Treasury note
spiked above 2.7 percent. Annaly Capital was the fifth
most-traded stock on the New York Stock Exchange.
The S&P 500 is down more than 3 percent from its May 21
record closing high of 1,669.16 and has been unable to close
above its 50-day moving average since June 19. The 50-day moving
average is a measure of the market's medium-term trend.
Wall Street has been closely tethered to central banks'
policies. It received a boost after central banks in Britain and
the euro zone signaled on Thursday that they were holding steady
their stimulus measures.