By STAN CHOE
AP Business Writer
NEW YORK (AP) — U.S. stocks are mixed in jumbled trading on Friday after a weak jobs report raised questions about the Federal Reserve’s timeline to pare back its immense support for markets.
The S&P 500 was 0.1% higher after wavering between a 0.1% loss and 0.3% gain in the first few minutes of trading. The Dow Jones Industrial Average was down 3 points, or less than 0.1%, at 34.751, as of 9:45 a.m. Eastern time, and the Nasdaq composite was 0.1% higher.
The U.S. jobs report is usually the most anticipated piece of economic data each month on Wall Street, and the immediate reaction to its release was a confused one. U.S. stock futures moved up, down and back again, as did Treasury yields.
The yield on the 10-year Treasury climbed to 1.59% from 1.57% late Thursday after initially dropping to 1.56% immediately following the jobs report’s release.
Much of Wall Street assumed the job market had improved enough for the Fed to soon begin paring back its monthly purchases of bonds meant to hold down longer-term interest rates. Investors had also pegged the central bank to begin lifting short-term interest rates next year. Current super-low interest rates have been one of the main forces driving stocks to record heights.
But Friday’s jobs report showed that employers added just 194,000 jobs last month, short of the 479,000 that economists expected. Many investors still expect the Fed to stick to its timetable, but the numbers were weak enough to at least raise the question about whether it may wait longer to taper its bond purchases or to eventually raise short-term rates.
“The miss on jobs isn’t pretty — there’s no way around it,” Mike Loewengart, managing director of investment strategy at E-Trade Financial, said in a statement. “And many may believe it will cause the Fed pause in terms of their tapering strategy. But the jury is out on how the market will interpret the data.”
Underneath the surface, the numbers don’t offer much more clarity. The unemployment rate ticked down to 4.8% from 5.1%, and average wages rose a bit faster from August than expected, while 610,000 jobs were lost in production and transportation.
That last point suggests to Jack Ablin, chief investment officer at Cresset Capital , that dysfunction in the world’s supply chains isn’t improving. Such supply issues have helped to send prices for all kinds of things jumping, from automobiles to food, with inflation rates at their highest level in more than a decade.
Rising energy prices have also been contributing to inflation, and benchmark U.S. crude climbed 2% to $79.89 per barrel. That helped drive energy stocks in the S&P 500 to a 2.1% gain, by far the biggest among the 11 sectors that make up the index.
Exxon Mobil rose 2%, and Pioneer Natural Resources climbed 3%.
Friday’s choppy trading extends an already volatile run since the S&P 500 set its last record high on Sept. 2. Worries about the Fed’s pulling back on its support for the market have combined with concerns about high inflation and political turmoil in Washington, D.C.
AP Business Writer Joe McDonald contributed.
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