Wall Street dips after two-day run, jobs data

By Chuck Mikolajczak

NEW YORK (Reuters) – U.S. stocks edged lower on Friday, after a two-day rally in equities put the S&P 500 back in positive territory for the new year as investors assessed a stronger-than-expected monthly payrolls report.

Nonfarm payrolls increased 252,000 in December, topping expectations for a rise of 240,000, while November’s outsized 321,000 gain was revised higher to 353,000. The unemployment rate fell 0.2 percentage point to a 6-1/2 year low of 5.6 percent.

Futures traded lower ahead of the payrolls data, then trimmed losses to turn slightly positive after the release.

Data separately showed wholesale inventories rose 0.8 percent in November, topping expectations calling for a 0.3 percent increase, suggesting restocking may boost fourth-quarter growth.

The S&P 500 (.SPX) added 3 percent over the last two sessions, retracing a good portion of its 4.2 percent loss in the previous five trading days, on expectations the U.S. economy will continue to accelerate and hopes the European Central Bank will take more aggressive stimulus action in the coming weeks.

“What we are seeing is a tug of war between the worries about slowing global growth and whether European policymakers can boost growth there,” said Kate Warne, investment strategist at Edward Jones in St. Louis.

“So there are still worries about the rest of the world, but the perception the U.S. is far enough away, and a big enough island that the waves of worry from the rest of the world don’t matter so much, is reinforced by today’s jobs report.”

The Dow Jones industrial average (.DJI) fell 70.93 points, or 0.4 percent, to 17,836.94, the S&P 500 (.SPX) lost 6.6 points, or 0.32 percent, to 2,055.54 and the Nasdaq Composite (.IXIC) dropped 7.21 points, or 0.15 percent, to 4,728.97.

AbbVie (ABBV.N) forecast 2015 earnings largely above analysts’ average estimate after the close Thursday, betting on its recently approved hepatitis C drug and growth in its auto-immune disease treatment, Humira. However, shares dropped 2.3 percent to $ 66.04 as health insurer Anthem (ANTM.O) said it reached a deal under which Gilead Sciences (GILD.O) hepatitis C drug Harvoni will be the primary treatment for patients infected with the virus.

Five Below (FIVE.O) slumped 15.3 percent to $ 36.97 after the discount retailer forecast fourth-quarter sales and earnings below Wall Street forecasts.

Bed, Bath & Beyond dropped 7.1 percent to $ 73.81 as the worst-performing S&P 500 component after the retailer reported third-quarter results but forecast fourth-quarter earnings at the low end of expectations.

Declining issues outnumbered advancing ones on the NYSE by 1,814 to 893, for a 2.03-to-1 ratio; on the Nasdaq, 1,437 issues fell and 809 advanced for a 1.78-to-1 ratio.

The benchmark S&P 500 index was posting 27 new 52-week highs and 5 new lows; the Nasdaq Composite was recording 34 new highs and 16 new lows.

(Editing by Bernadette Baum)