The stock market shook off much of its early losses at midday Friday after the November employment report brought out the sellers.
The Nasdaq composite halved its loss to 0.5% at the noon hour. The index, hobbled by a worst-performing big tech sector, gave back some of the week's gains. But it's still on track for a 1.7% weekly gain.
The S&P 500 reduced its loss to 0.3% and is up 0.7% for the week, facing a test of its 200-day moving average and the 4,000 level. The Dow Jones Industrial Average dropped 0.1%. The small-cap Russell 2000 was down a fraction after working off a loss of more than 1%.
Volume was sharply lower on the NYSE and Nasdaq compared with the same time on Thursday.
The yield on the 10-year Treasury note climbed 4 basis points to 3.57%.
The price of U.S. crude oil was almost flat at $81.21 a barrel ahead of potential market-moving events.
U.S. and European allies are trying to agree on a price cap related to restrictions on Russian oil. OPEC and other major oil producing nations meet on Sunday to discuss next targets on oil output. On Monday, expanded sanctions on Russia go into effect.
Job Market Remains Resilient
The U.S. Labor Department said 263,000 jobs were created in November, while the unemployment rate matched estimates, unchanged at 3.7%. Economists had forecast 200,000 new jobs.
The better-than-expected report suggests the economy can still tolerate higher interest rates. The stock market has been sensitive to the Fed's tightening policy and to measurements of inflation.
And November's employment data featured an unwelcome indication of higher costs: Average hourly earnings climbed 0.6% from the previous month, double economists consensus estimate. Hourly earnings rose 5.1% on an annual basis, also above expectations.
"The recent wave of layoff announcements at some big high-tech firms has yet to make a major mark," Sal Guatieri, chief economist at BMO Capital Markets, said in an analysis. He added that the household survey — which is different from the payrolls report — continued to show more softness, with employment falling 138,000.
Odds of a half-point interest rate hike at this month's Fed meeting didn't change much. CME Group's FedWatch puts that probability at 77%, with a 23% chance of a 75-basis point increase. For the February meeting, more than 48% of traders are betting on a half-point increase.
Stock Market Movers
The Innovator IBD 50 ETF fell 0.4%, a decent performance compared with the rest of the market. A mix of health care and commodity-related stocks gave the IBD 50 some lift.
IBD 50 component Catalyst Pharma regained its 16.76 buy point from a cup with handle. The buy zone goes to 17.60.
H.F. Sinclair slid below its 50-day moving average in heavy volume and is nearly back to its 56.40 buy point. Downside volume has been unusually heavy the past few days. All those are bearish signals.
Restaurant chain Cracker Barrel sold off more than 12% in big volume after earnings for the October-ended quarter missed expectations. The stock gapped down more than 11% and is trading 12% below the 114.88 buy point of a cup base, causing a sell signal.
Cheesecake Factory fell 4%. Reports said Wedbush downgraded the restaurant to neutral and cut the price target from $37 to $35. The stock is below the 34.43 buy point of a late-October breakout, and the round-trip of gains is a sell signal.
Zscaler slid 11.5% in huge volume following the cybersecurity company's earnings report. Management raised the low end of the fiscal 2023 billings guidance, but did not lift the high end. The stock remains in a deep correction.
