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 Crude oil slipped under $50 a barrel as Brent, the global benchmark,
posted a seventh straight weekly loss. Gold rose and notched its
first weekly gain in four weeks as political uncertainty in Greece
boosted demand for safe-haven assets.
Also weighing on investors was a Reuters report that raised concerns
that prospective European Central Bank bond-buying may fall short of
the unlimited money-printing program investors have expected.
"The news out of the ECB this morning, this leaking out about what
the program may look like, people are disappointed because they
don't think it is big enough, so that is causing some pullback,"
said Ken Polcari, director of the NYSE floor division at O'Neil
Securities in New York.
Investors are still concerned about the impact of lower oil prices
and how that might expose certain trades in the financial markets,
said Jack Ablin, chief investment officer at BMO Private Bank in
Chicago.
"Somebody's going to cry 'uncle,' we just don't know who it is yet,"
he said.
Data from Germany highlighted weakness in the euro zone, which is
still struggling to emerge from the region's long-simmering economic
crisis. German exports fell sharply in November and industrial
output also declined.
U.S. job growth increased briskly in December and the jobless rate
dropped to a 6-1/2-year low. But wages slipped from November,
buttressing the case for the Federal Reserve not to rush to raise
interest rates.
The 5-cent drop in average hourly earnings, which nearly erased
gains seen in November, took some shine off an otherwise mostly
upbeat labor report, economists said.
Markets are caught between stock and bond investors over-reacting to
economic data and global events, pushing U.S. equities to new highs
and bond yields to record lows, said David Kelly, chief global
strategist for JPMorgan Funds in New York.
"The only thing that is more bizarre than a lack of wage growth
right now is the fact that, in an economy that is growing as rapidly
as this one, is that you can have a 2 percent Treasury. That makes
no sense at all," Kelly said.
The dollar traded at 118.56 yen <JPY=EBS>, a loss of 0.91 percent on
the EBS trading platform. The euro <EUR=> rose 0.43 percent to
$1.1843.
MSCI's all-country world stock index <.MIWD00000PUS>, a measure of
equity markets in 45 countries, fell 0.47 percent. The pan-European
FTSEurofirst 300 index <.FTEU3> of leading regional companies closed
down 1.45 percent at 1,348.58.
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On Wall Street, the Dow Jones industrial average <.DJI> closed down
170.5 points, or 0.95 percent, at 17,737.37. The S&P 500 <.SPX> fell
17.33 points, or 0.84 percent, to 2,044.81, and the Nasdaq Composite
<.IXIC> lost 32.12 points, or 0.68 percent, to 4,704.07.
For the week, both the Dow and Nasdaq fell 0.5 percent, while the
S&P slipped 0.6 percent.
Brent <LCOc1> settled down 85 cents at $50.11 a barrel, after
earlier falling as low as $48.90.
U.S. crude <CLc1> settled down 43 cents at $48.36 a barrel.
U.S. Treasury debt prices rose on the view that rates are on hold.
Perceived odds on the Fed raising rates by September fell to 52
percent, according to CME Fed watch, which tracks futures contracts.
That was down from 60 percent before the jobs data.
The benchmark 10-year note <US10YT=RR> traded up 16/32 in price to
yield 1.9605 percent, according to Reuters data.
Government bond yields in the euro zone were just above record lows.
About a quarter of the euro zone bond market now yields less than 10
basis points, while German bonds with maturities of up to five years
are yielding zero or less.
Yields on 10-year Bunds <DE10YT=TWEB>, which set the standard for
the bloc's borrowing costs, fell to 0.488 percent.
U.S. gold futures for February delivery <GCcv1> rose 0.6 percent to
settle at $1,216.10 an ounce.
Copper prices slipped to 4-1/2-year lows on concerns about
oversupply after inventories climbed and worries about global
growth, especially in top metals consumer China.
(Reporting by Herbert Lash; Additional reporting by Chuck
Mikolajczak in New York; Editing by Dan Grebler, Nick Zieminski and
Leslie Adler)
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