Stocks Come Under Pressure After Seeing Initial Strength - U.S. Commentary

(RTTNews) - While stocks moved moderately higher at the start of trading on Friday, buying interest waned not long after the open. The major averages have subsequently pulled back off their highs for the young session and into negative territory.

The major averages have seen some further downside in recent trading, sliding more firmly into the red. The Dow is down 56.16 points or 0.3 percent at 16,388.60, the Nasdaq is down 9.79 points or 0.2 percent at 4,146.40 and the S&P 500 is down 4.52 points or 0.3 percent at 1,833.61.

The pullback by the markets comes as traders digest the Labor Department's closely watched monthly employment report.

The report showed much weaker than expected jobs growth in the month of December, although it also showed that the unemployment rate fell to a new five-year low.

The report said non-farm payroll employment edged up by 74,000 jobs in December compared to economist estimates for an increase of about 200,000 jobs.

The job growth in December reflects a substantial slowdown from the upwardly revised increase of 241,000 jobs in November.

Bad weather during the month likely contributed to the weaker than expected job growth, as the Labor Department said 273,000 people were not able to work because of the weather, the most since 1977.

At the same time, the Labor Department said the U.S. unemployment rate dropped to 6.7 percent in December from 7.0 percent in November. The drop pulled the unemployment rate down to its lowest level since October of 2008.

While the drop in the unemployment rate came as a surprise to economists, the decline was largely due to a decrease in the size of the labor force as some unemployed people gave up looking for work.

The data has led to some uncertainty about the outlook for the Federal Reserve's stimulus program, with the weak job growth raising questions about whether the central bank will continue to scale back its asset purchases.

Brokerage, banking, and networking stocks have come under pressure on the day, while strength remains visible among gold, trucking, and utilities stocks.

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Friday. Japan's Nikkei 225 Index rose by 0.2 percent, while China's Shanghai Composite Index dropped by 0.7 percent.

Meanwhile, the major European markets have all moved to the upside on the day. While the U.K.'s FTSE 100 Index has advanced by 0.9 percent, the German DAX Index and the French CAC 40 Index are up by 0.6 percent and 0.5 percent, respectively.

In the bond market, treasuries have moved sharply higher on the heels of the monthly jobs report. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, has tumbled by 8.5 basis points to 2.878 percent.