December 7, 2007 / 5:13 AM / 12 years ago

Wall Street end flat on oil, jobs; eyes on Fed

NEW YORK (Reuters) - Stocks ended little changed on Friday as a sharp drop in oil prices and signs of resiliency in the labor market offset concerns that tighter credit is hurting consumer spending.

Traders work on the floor of the New York Stock Exchange, December 5, 2007. REUTERS/Brendan McDermid

A drop of more than 2 percent in oil prices buoyed shares of big manufacturers like Boeing Co (BA.N) and 3M Co (MMM.N).

Data showing modest payrolls growth in November helped ease recession fears and showed the job market remains resilient despite the crumbling housing market and tight credit conditions.

Credit card companies’ shares fell, however, after brokers downgraded the stocks and said tightening credit was pressuring not only the economy, but consumer credit performance.

Shares of American Express Co (AXP.N) fell more than 4 percent, while Capital One Financial (COF.N) fell 5 percent.

“What looked like an economy that was falling apart as recently as two weeks ago suddenly sees news that seems to be better than expected,” said Eric Kuby, chief investment officer at North Star Investment Management Corp in Chicago.

The jobs report, he said, may have tempered expectations for a far more aggressive cut in interest rates next Tuesday when the Federal Reserve’s policy-setters meet.

But as the market had rallied in recent days in anticipation of a bigger cut, “if you don’t get 50 basis points next week, I think the market will be extremely disappointed.”

The Dow Jones industrial average .DJI finished up 5.69 points, or 0.04 percent, at 13,625.58.

But the Standard & Poor's 500 Index .SPX closed down 2.68 points, or 0.18 percent, at 1,504.66. The Nasdaq Composite Index .IXIC slipped 2.87 points, or 0.11 percent, to 2,706.16.

For the week, however, all three major U.S. stock indexes finished with gains — with the Dow up 1.9 percent, the S&P 500 rising 1.6 percent and the Nasdaq gaining 1.7 percent.

Ahead of Friday’s jobs report, investors had been hopeful that the Federal Reserve was leaning toward cutting short-term rates by a half percentage point to rescue a sinking economy after recent comments by Fed officials.

The Labor Department report showed U.S. employers added 94,000 jobs last month, slightly above forecasts by Wall Street analysts and a moderately positive sign for the economy.

Shares of jet plane maker and U.S. defense contractor Boeing ended up 1.5 percent at $93.16 on the New York Stock Exchange, while those of 3M, whose products include Scotch tape and Post-it notes, gained 1.6 percent to close at $86.19. The two stocks were the top contributors to the Dow’s slim gain.

On the New York Mercantile Exchange, January crude CLF8 settled down $1.95, or 2.2 percent at $88.28 a barrel, after trading from $87.07 to $90.68.

A DENT IN THE WALLET

American Express shares declined 4.3 percent to $56.96 and shares of Capital One dropped 5.02 percent to $49.80.

On the Nasdaq, shares of biotech company Amgen Inc (AMGN.O) led decliners, countering a rise in shares of Apple Inc (AAPL.O), the maker of the iPhone.

Amgen shares declined 5.5 percent to $52.10 after a brokerage cut its price target on the stock, a day after the company said it was talking with U.S. regulators about updating safety warnings for anemia drugs amid concerns about their use by breast and cervical cancer patients.

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A bright spot was Apple, whose stock finished up 2.3 percent at $194.30, extending gains from the previous two sessions on optimism about the outlook for big tech.

Volume was modest on the NYSE, where only 1.20 billion shares changed hands, far below last year’s estimated daily average of 1.84 billion. On the Nasdaq, about 1.92 billion shares traded, below last year’s daily average of 2.02 billion.

Advancers outnumbered decliners on the Big Board by a ratio of 16 to 15. In contrast, on the Nasdaq, about 15 stocks fell for every 14 that rose.

Editing by Jan Paschal

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