Jan. 10 - Summary: Stocks were little changed as investors discount dismal hiring in December; homebuilders rally as debt yields tumble; Target security breach bigger and wider than first revealed. Conway G. Gittens reports.
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U.S. stocks fluctuated between positive and negative territory as a weaker-than-expected jobs number provided little certainty of what's really going on with the economy.
The Dow was unable to climb out of a small hole, but the S&P 500 and Nasdaq managed to turn slight gains.
Blue chips were slightly lower for the week, while the Nasdaq posted a gain of one percent.
U.S. employers hired only 74,000 workers in December, the smallest gain in three years. New jobs were largely focused in two areas - retail and temp - helped by the holidays. Government hiring fell by 13,000. Some economists say the setback was likely temporary, with unusually cold weather to blame.
Steve Blitz is the chief economist at ITG Investment Research.
SOUNDBITE: STEVE BLITZ, CHIEF ECONOMIST, ITG INVESTMENT RESEARCH (ENGLISH) SPEAKING:
"It's not as bad as it looks, but it's not great either. It probably puts us back into sort of a 150 - 160 type of an average payroll increase, which is less than we saw in the last few months. And it should temper a little bit the enthusiasm that had been building that this economy was about to launch into some sort of breakneck speed."
The unemployment rate fell to 6.7 percent, its lowest level since October 2008, but the decline mostly reflected people leaving the labor force.
The payroll report suggests the Federal Reserve doesn't have to rush to further slow bond purchases; that sent yields on the 10-year note lower, which gave homebuilders like Lennar and D.R. Horton a boost, with investors betting the group will benefit if mortgage rates are subdued.
The holiday season data breach at Target was far bigger than the company first announced. The retailer says an investigation shows 70 million people were impacted up from the 40 million first revealed. The security mishap took a toll on the company's sales - prompting Target to lower its revenue forecast for the fourth quarter. Shares of the discount retailer sagged by more than one percent.
The stock performance for Sears was much worse - down almost 14 percent. The retailer saw steep same-store sales declines during the crucial holiday season at both Sears and Kmart.
Meanwhile, shares of Alcoa fell 5.4 percent a day after posting results hurt by a decline in aluminum prices.
European stocks climbed to a new 5-1/2-year high on a string of strong corporate updates, but the rally was restrained by that weak U.S. jobs report.
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