Stocks shake off U.S. strike on Syria, jobs miss to end turbulent week a tad lower
U.S. stocks capped off a turbulent week with small losses Friday as a resilient market was able to overcome jitters following a U.S. airstrike targeting a Syrian air base and a report showing U.S. job growth slowed sharply in March.
All three major U.S. stock indexes posted small losses for the week as well. The Dow Jones industrial average fell 6.85 points or 0.03%, to 20,656.10, leaving it down a similar amount for the week. The Standard & Poor's 500 fell 1.95 points, or 0.08%, to 2355.54, pushing its weekly loss to 0.3%. The Nasdaq composite, which is dominated by technology stocks, declined 1.14 points, or 0.02%, to 5877.81, to close the week down 0.6%.
News of U.S. military involvement in Syria added to concerns of geopolitical risk.
"The U.S. airstrikes on Syria serve as a dramatic reminder that many of the simmering crises around the world can flare-up with a virtual moment’s notice, with potentially dramatic impacts on financial markets and the economy," says Mark Hamrick, Bankrate.com's senior economic analyst. "For the moment, investors are betting that this story is relatively short-lived."
U.S. stocks were also hurt by a weaker-than-expected March jobs report, which showed just 98,000 jobs were created, roughly half of what Wall Street had forecast.
The disappointing jobs report, which was partly blamed on nasty winter weather that hurt hiring in construction and retail, reinforced fears the economy is slowing.
But Paul Ashworh, chief U.S. economist at Capital Economics, downplayed fears that the weak jobs report was signaling that the U.S. economy is "poised for collapse." Instead, he says, "the truth is this is mostly just weather-related noise."
In a good sign, the market held up despite many setbacks this week, which also included a sizable drop in the number of vehicles sold in March, as well as news that the Federal Reserve plans on paring back its $4.5 trillion bond portfolio later this year, a move that would drain more stimulus from the financial system.
The week ahead will bring fresh market-moving developments, including key earnings reports from major U.S. banks JPMorgan Chase and Wells Fargo. Optimism for the first-quarter earnings season is strong, with analysts forecasting profit growth of more than 10% for companies in the S&P 500.
Investors will also be eyeing the March retail sales report for fresh insights into the health of U.S. consumers, which account for roughly two-thirds of the nation's economic activity.
As is often the case when international events turn volatile, demand for so-called haven investments got an initial boost early Friday. Gold, which is viewed as a safe place to park cash in times of uncertainty, was up as much as $15 per ounce, but the gains were pared during the day to $3.60, or 0.3%, to $1,256.90 an ounce. Investors also moved cash into U.S. government bonds, although that trade also reversed by day's end. The price of the 10-year Treasury note, which rallied early in the session to drive yields down to a five-month low of 2.27%, ended lower, with the yield ending higher and above 2.38%.
U.S. warships fired about 60 cruise missiles at a Syrian government-controlled air base Thursday in retaliation for a horrific chemical attack against civilians. The attack was a reversal for Trump, who had previously warned against involvement in the Syrian war but now says it is in the “vital national security interest” of the United States.
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Oil prices initially jumped on concerns the airstrikes would reignite Middle East turmoil. U.S. benchmark crude, which at one point Friday was up more than 2% to $52.94 a barrel in electronic trading on the New York Mercantile Exchange, gave up some of those gains. U.S.-produced crude rose 58 cents, or 1.1%, to $52.28.
“All of this adds up to potential turmoil in the world and also to potential supply disruptions to crude which have reacted as expected and moved materially higher,” Jeffrey Halley, senior market analyst at OANDA, said in a commentary.
The strikes came as Trump and Chinese President Xi Jinping opened a high-stakes summit in Florida. Tensions over trade and North Korea’s nuclear ambitions are among big topics on the agenda for the first meeting between the leaders of the world’s two biggest economies. Trump appeared lighthearted as he greeted Xi ahead of a dinner on Thursday evening before the two were to tackle specifics the next day.
European shares closed mixed. France’s CAC 40 gained 0.3%. Germany’s DAX fell 0.1%. Britain’s FTSE 100 rose 0.6%.
Contributing: Associated Press