From The Associated Press
NEW YORK —
The stock market turned higher Friday morning on news that the U.S. added more jobs in November. But underneath the headline numbers, the government’s monthly employment report gave a mixed read on the economy.
The Dow Jones industrial average was up 57 points at 13,130 after the first half-hour of trading. The Standard & Poor’s 500 index rose two to 1,416. The Nasdaq composite index edged down a fraction of a point to 2,989.
The main numbers from the jobs report were encouraging. The Labor Department said the U.S. added 146,000 jobs last month. The unemployment rate fell to 7.7 percent from 7.9 percent, the lowest level since December 2008. That was in the middle of the recession, and just as the unemployment rate was starting to shoot decisively higher.
However, the details of the report painted a much less positive view of the economy. The unemployment rate fell largely because discouraged unemployed workers stopped looking for work, and weren’t counted among the unemployed. Also, the Labor Department revised previously released jobs numbers downward, saying that employers added 49,000 fewer jobs in October and September than initially estimated.
Nicholas Colas, ConvergEx chief market strategist, wasn’t impressed. In a note to clients, he said U.S. unemployment seems to be more consistent with “an ongoing recession than expansion.”
In the recession of the early 1990s and its aftermath, the highest rate of unemployment was 7.8 percent. In the recession of the early 2000s and its aftermath, the unemployment rate never got above 6.3 percent.
The jobs report also couldn’t erase the overhang of other challenges, notably the “fiscal cliff” drama in Washington. Congress and the White House are trying to hammer out an agreement on government spending and tax rates before Jan. 1. If they don’t, lower spending and higher taxes will kick in.
The drama has made traders indecisive, as many are unwilling to make any big moves until they know how the budget negotiations will be resolved. The markets have been wishy-washy. In the 21 trading days since the presidential election, the Dow has been up 10 and down 11. So far this week, it’s finished up twice and down twice.
News from overseas wasn’t encouraging. The Asian Development Bank, a lending institution based in the Philippines, predicted that growth will slow next year in India, South Korea, Hong Kong, Taiwan and other parts of Asia.
Germany’s central bank, the Bundesbank, sharply slashed its predictions for its own country’s economic growth next year. Greece reported that its economy shrank again in the third quarter, by nearly 7 percent. And earlier this week, the European Central Bank predicted that the recession plaguing the euro zone, which encompasses the 17 countries that use the euro, will continue next year.
Among the companies making big moves:
—Apple was down $1.96 to $545.28. The move amounted to less than 1 percent, but it’s significant because it’s part of a longer trend. Apple’s stock has plunged more than 20 percent since the iPhone 5 went on sale Sept. 21, as investors wonder whether the company, still enjoying immense popularity for the iPhone and iPad, can keep the momentum going. Apple makes up 4 percent of the S&P 500 index and nearly 12 percent of Nasdaq, so how it fares can have an enormous effect on the rest of the market.
—AIG, the bailed-out insurance company, jumped nearly 3 percent, rising 93 cents to $34.19. A group of Chinese companies is reportedly in talks to buy AIG’s aircraft leasing unit, which could help AIG raise cash to pay off more of its government loans.
—Cisco Systems, the company that makes Internet networking gear, jumped about 1 percent, rising 17 cents to $19.65. CEO John Chambers, speaking at the company’s analyst day, reportedly told analysts that he expects to expand the company from gear making into software and other services.