Stocks closed lower Friday, despite a January jobs report that was mostly positive. Indexes still closed with solid gains for the week.
XIndexes opened surprisingly lower after a blowout jobs report for January. U.S. employers added 225,000 positions, well above economist forecasts for 160,000 new jobs. The 34.3 hours for the average workweek was below expectations and may have scared investors.
Also, the Federal Reserve warned of economic risks from the coronavirus that originated in China. "The recent emergence of the coronavirus, however, could lead to disruptions in China that spill over to the rest of the global economy," the Fed wrote in a scheduled report to Congress. The Fed gave no indication of any change in monetary policy.
The stock market quickly started reducing losses after the open. But another wave of selling started after midday. Indexes closed near session lows.
The Nasdaq composite and the S&P 500 each lost 0.5%.
The Dow Jones Industrial Average fell more, down 0.9%. Boeing (BA), which seems to keep making missteps, fell more than 1%. NASA said the Boeing Starliner capsule had a potentially catastrophic software issue during a test flight in December, in which the spacecraft failed to reach its intended orbit.
Volume fell from Thursday's totals, according to early figures. Breadth was poor, as declining stocks led advancers by about a 2-1 ratio on the NYSE and by 7-to-3 on the Nasdaq.
Small Caps Down 1.2% After Jobs Report
Small caps again were sharply weaker than larger stocks. The Russell 2000 dropped 1.2%, after lagging Thursday's market with a 0.3% decline. The Russell 2000 is now down 0.7% for the year, while major indexes are still up.
Although stocks fell after the jobs report, indexes still logged hearty advances for the week. The Nasdaq rose more than 4% for the week, the S&P 500 and Dow more than 3% each.
Retail, materials, technology and health care were the weakest S&P sectors. SPDR S&P Retail ETF (XRT) fell nearly 2% and met resistance at its 50-day moving average this week.
Omnicell (OMCL) broke out of a cup-with-handle base in heavy volume but reversed sharply lower. The medication and surgical supplies management system maker reported fourth-quarter results after Thursday's close. It posted EPS that was barely below the consensus estimate.
Motorola Solutions (MSI) rose past the 180.40 buy point of a cup with handle. But the maker of mobile phones and communications devices closed below the entry, and volume was soft.
Gardner Denver (GDI) cleared a 37.34 buy point in a base on base formation. Volume was more than double its average, but the industrial equipment manufacturer ended the session just below the buy point.
Juan Carlos Arancibia is the Markets Editor of IBD and oversees our market coverage. Follow him at @IBD_jarancibia
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