Wall Street ended a record-breaking week quietly Friday, edging lower after the Labor Department said US employers added far fewer jobs than expected last month. The major indexes all scored big gains for the week.
While the jobs report gave investors further confirmation that the economy is slowing - employers created just 51,000 jobs last month, well off the 120,000 Wall Street expected - the market is now concerned that the economy might be moderating too much.
Even the prospects of a rate cut by the Federal Reserve came as little comfort Friday.
"We've had a market that wants to see bad news as good news with respect to the Fed," said Bryan Piskorowski, a market analyst at Wachovia Securities LLC. "[Now the] economy is slowing, the housing market is slowing, consumer spending is starting to slow. You run that tight wire where bad news eventually becomes bad news."
Investors concerned about the jobs report were also disappointed by news of the resignation of a General Motors Corp. board member who lobbied unsuccessfully for an alliance with other automakers.
But hopes for a Fed rate cut as well as a further decline in oil prices helped drive the 30-stock Dow Jones industrial average to three straight record high closes this week. The blue chips also set new intraday highs. Broader indexes also showed robust gains, though remained well below their all-time highs.
The Dow was down 16.48, or 0.14 percent, at 11,850.21 Friday, slightly below the record close of 11,866.69 set the day before.
Broader stock indicators also fell. The Standard & Poor's 500 index was down 3.64, or 0.27%, at 1,349.58, and the Nasdaq composite index fell 6.35, or 0.28%, to 2,299.99.
The week was a memorable one for investors, with the Dow finally recovering from the dot-com meltdown early in the decade, recession and then the September 11 , 2001, terror attacks. Corporate malfeasance made household names of companies like Enron Corp. and further undermined investor confidence before more than four years of solid corporate profit growth helped rebuild the Dow. Most recently, the Fed's decision to stand pat on interest rates bolstered investor enthusiasm.
The Dow, which also set a trading high Thursday of 11,870.06, rose 1.47% for the week, while the S&P gained 1.03% and the Nasdaq rose 1.84%. Despite the overall gains in the market, the S&P stands about 12% below its high close of 1,527.46 and the Nasdaq is even further off, about 54% below its March 2000 high of 5,048.62.
Bonds fell Friday, with the yield on the benchmark 10-year Treasury note rising to 4.70% from 4.61% late Thursday. The dollar was mixed against other major currencies, while gold prices rose.
Light sweet crude settled down 27 cents at $59.76 a barrel on the New York Mercantile Exchange. Investors are still paying close attention to oil prices, as their decline has helped drive the market's upward rise in recent months. Crude prices are down sharply from their trading high for the year of $78.40 a barrel, which came in July.
Kevin Logan, chief US economist at Dresdner Kleinwort, said stocks rose this week as investors found encouragement in falling oil prices.
"It lessens inflation pressure and lowers the possibility that the Fed would have to raise rates," he said.
GM was down $2.08, or 6.28%, at $31.05 after Jerome York resigned from the automaker's board following the company's failure to form an alliance with Japan's Nissan Motor Co. and France's Renault SA. York has been an ally with dissident shareholder Kirk Kerkorian, whose Tracinda Corp. has a 9.9% stake in GM. Kerkorian has been agitating for change at the troubled company.
In other corporate news, Micron Technology Inc. fell $2.40, or 13.68%, to $15.14 after issuing a profit report that disappointed investors. Lackluster sales of flash memory chips raised questions about the company's efforts to diversify.
Business software maker WebMethods Inc. closed down 81 cents, or 10.8%, to $6.67 after it said it wouldn't meet its second-quarter sales forecasts. The company said its sales force faced difficulty closing deals despite ample orders.
Guitar Center Inc. was down $3.13, or 6.86%, to $42.50 following a warning that its third-quarter sales wouldn't meet forecasts because of flat sales of guitars and poor results from its catalog business.
Crown Castle International Corp., which builds signal towers for mobile phones, declined $1.65, or 4.75%, to $33.10 after agreeing to acquire rival Global Signal Inc. for $4 billion in cash and stock. Including debt, the deal is valued at $5.8b. Global Signal jumped $3.84, or 7.66%, to $53.94.
Chattem Inc. rose $9.77, or 28.4%, to $44.20 after it agreed to buy five over-the-counter products, including mouthwash and a sleep aid, from Johnson & Johnson and Pfizer Inc.
The Russell 2000 index of smaller companies was down 3.27, or 0.44%, at 739.81.
Declining issues outnumbered advancers by about 2 to 1 on the New York Stock Exchange, where consolidated volume came to 2.56b. shares, compared with 2.73b. traded Thursday.
Meanwhile, Japan's Nikkei stock average closed down 0.08%. Britain's FTSE 100 ended down 0.05%, Germany's DAX index was up 0.17%, and France's CAC-40 was down 0.12%.
The Dow Jones industrials ended the week up 171.14, or 1.47%, to finish at 11,850.21. The S&P 500 index rose 13.73, or 1.03%, to 1,349.58.
The Nasdaq gained 41.56, or 1.84%, to end at 2,299.99.
The Russell 2000 index closed the week up 14.22, or 1.96%, at 739.81.
The Dow Jones Wilshire 5000 Composite Index - a free-float weighted index that measures 5,000 US based companies - ended the week at 13,494.83, up 357.2 points from last week. A year ago the index was at 11,904.01.