A much stronger than expected jobs report that showed little in the way of wage pressures did little to right the struggling financial sector on Friday, but strength in the tech sector eventually dragged blue chip stocks higher by the close.
The banking sector ended the day 1.6% lower on weakness in Merrill Lynch and Washington Mutual, but Citigroup recouped much of its losses by the end of the day on a Dow Jones report that the financial giant will hold an emergency board meeting this weekend. Fears about Citi’s credit market losses were behind Thursday’s steep stock market plunge.
Also helping the financial sector finish off its lows were comments by famed fund manager Bill Miller that financial stocks will outperform other sectors over the next five years.
Stocks posted early gains after the Labor Department reported an October jobs gain of 166,000 and 0.2% wage growth, both better than expected, but a Wall Street Journal report that suggested that Merrill may have tried to cover up credit market losses soon had stocks on the defensive once again. E*Trade also continued its weakness, losing another 8%.
But strength in the tech sector, which ended the day less than 2% from a multiyear high, helped the Dow and S&P 500 erase their losses by the close.
Tech stocks gained on better than expected quarterly results from a number of names, including CA, Western Digital, RadiSys and Synaptics.
Sun Microsystems and Cisco Systems, both of which will report their results next week, also rose.
Baidu continued to live up to its reputation as the Google of China, gaining 6% to close above $400 a share for the first time.
But Glu Mobile, Silicon Image, Opnet, Insight Enterprises, Ditech Networks and Maxim fell on their results.
The Nasdaq rose 15 to 2810, the S&P added 1 to 1509, and the Dow rose 27 to 13,595. Volume rose to 4.29 billion shares on the NYSE, but declined to 2.47 billion on the Nasdaq. Decliners led by a 17-15 margin on the NYSE, and 15-14 on the Nasdaq. Upside volume was 44% on the NYSE, and 66% on the Nasdaq. New highs-new lows were 96-268 on the NYSE, and 94-284 on the Nasdaq.