US stocks finish mixed following jobs, services data

Source: Agencies  |   2008-7-4  |     ONLINE EDITION

WALL Street capped a shortened trading week with a mixed finish yesterday after some uneven economic data: news of a contraction in the United States' services sector and a tame reading on employment.

The Dow Jones industrial average showed a sizable advance, while the broader indexes ended mixed. The stock market closed early ahead of the Fourth of July holiday.

The Institute for Supply Management said its index of service sector activity fell to 48.2 from 51.7 in May. That news touched off more misgivings about the well-being of the economy.

The look at the service sector follows a largely as-expected report from the Labor Department, which said the US unemployment rate held steady at 5.5 percent last month. The government also reported that 62,000 jobs were lost in June, but that number was close to economists' forecasts.

The jobs report appeared to assuage some worries that the snapshot of the labor market would be more grim. Employment numbers are critical because consumers who are out of work or are nervous about losing their job are likely to cut their spending. They've already become cautious because of higher food and energy prices.

Christopher Molumphy, chief investment officer at Franklin Templeton fixed income group, said the employment figures don't point to a labor market in distress. "We are not seeing data that would be consistent with recessionary conditions," he said.

He also said volatility in yesterday's shortened session wasn't unexpected. Low trading volume and liquidity can skew price movements.

"Unusual short-term volatility should and would not be unexpected," Molumphy said. "Frankly, we try not to overanalyze some of the moves because I think you can easily do that."

The Dow rose 73.03, or 0.65 percent, to 11,288.54.