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Dec 2, 3:51 PM EST

Stocks tread water as big dividend payers jump and banks dip


AP Photo
AP Photo/Richard Drew

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NEW YORK (AP) -- Investors are making a small move back to traditionally safe assets Friday afternoon after rallying over the last few weeks. Bond prices are rising, as are real estate, telecommunication and household goods companies. Banks are falling as lower bond yields make it harder for them to make money from lending. The Dow Jones industrial average, which closed at a record high a day ago, is down slightly.

KEEPING SCORE: The Dow lost 19 points, or 0.1 percent, to 19,173 as of 3:40 p.m. Eastern time as Goldman Sachs, which closed at a nine-year high Thursday, skidded. The Standard & Poor's 500 index rose 1 point, or 0.1 percent, to 2,192. The Nasdaq composite added 5 points, or 0.1 percent, to 5,256.

A post-election rally for U.S. stocks petered out this week. Major indexes had risen to record highs over the last three weeks, but the S&P 500 and Nasdaq indexes are lower for the week. The Dow is little changed.

US JOBS DATA: U.S. employers added 178,000 jobs in November as hiring remained steady. The results cemented market expectations that the Federal Reserve will raise interest rates later this month. However, fewer people looked for work and hourly wages slipped.

Russ Koesterich, head of asset allocation for BlackRock's Global Allocation Fund, said investors hope to see a combination of strong wage growth and economic stimulus spending in 2017. The weak wage figures throw that into doubt.

"It suggests that inflationary pressures maybe aren't building as quickly, at least one the wage side, as some had supposed," he said. "You're less likely to see inflation build if people aren't getting paid more because they can't afford to spend more."

BONDS: Bond prices, which have been falling sharply since the presidential election, rose in afternoon trading. The yield on the 10-year Treasury note fell to 2.40 percent from 2.45 percent. That helped utility and real estate companies and consumer goods makers, which are often compared to bonds because of their big dividend payments. When bond yields fall, those stocks become more appealing to investors seeking income. General Growth Properties rose 66 cents, or 2.6 percent, to $25.50 and Exelon rose 88 cents, or 2.7 percent, to $33.05. PepsiCo climbed $1.32, or 1.3 percent, to $100.35.

BANKS: The drop in bond yields also affected banks because yields are linked to interest rates. Lower interest rates mean banks can't make as much money from lending. Goldman Sachs fell $3.14, or 1.4 percent, to $223.49 and Citigroup gave up $1.13, or 2 percent, to $56.14.

The S&P 500 index of financial stocks is at its highest level since 2008, and it's up 13 percent since the presidential election.

BOWING OUT: Starbucks shares slid $1.37, or 2.3 percent, to $57.14 after the company said Howard Schultz will step down as CEO in April. He will remain chairman of the company, and Starbucks said he will focus on new ideas like high-end shops. President and Chief Operating Officer Kevin Johnson will become CEO. Schultz gave up the CEO title in 2000, and investors feel Starbucks struggled until he became CEO again in 2008.

RETAIL: Discount retailer Five Below jumped after it said it's off to a strong start this holiday season. That helped the stock rebound from losses over the last week. It picked up $3.89, or 9.8 percent, to $43.78. Also rising was Ascena Retail, as its Ann Taylor and Dressbarn business did better than analysts expected. The stock gained $1.21, or 20.7 percent, to $7.04, but it's still down almost 30 percent this year.

Gap lost 63 cents, or 2.9 percent, to $24.32 after it reported weak sales in November. That included sluggish results for Old Navy, which has been its best-performing business in recent years but has struggled lately.

OFF DAY: Human resources software company Workday gave a weak forecast. CEO Aneel Bhusri said some customers have recently delayed completing large deals, partly because of "global uncertainties such as Brexit, the U.S. presidential election, and pending elections in other G8 countries." Workday's stock tumbled $10.21, or 12.5 percent, to $71.39.

ENERGY: Benchmark U.S. crude added 62 cents, or 1.2 percent, to $51.68 a barrel in New York. Brent crude, the standard for pricing international oils, picked up 52 cents, or 1 percent, to $54.46 a barrel in London. The price of oil surged 12 percent this week after OPEC countries agreed to trim the production of oil next year. That was the biggest weekly rise in oil prices since February 2011.

METALS: Gold rose $8.40 to $1,177.80 an ounce. Silver jumped 33 cents, or 2 percent, to $16.83 an ounce. Copper lost 2 cents to $2.63 a pound.

OTHER ENERGY TRADING: Wholesale gasoline picked up 1 cent to $1.56 a gallon. Heating oil added 1 cent to $1.66 a gallon. Natural gas lost 7 cents, or 2 percent, to $3.44 per 1,000 cubic feet.

CURRENCIES: The dollar fell to 113.70 yen from 114.04 yen. The euro rose to $1.0660 from $1.0645.

OVERSEAS: The CAC-40 in France fell 0.7 percent and the FTSE 100 index in Britain finished 0.3 percent lower. Germany's DAX fell 0.2 percent. The Nikkei 225 index in Japan shed 0.5 percent and South Korea's Kospi lost 0.7 percent. Hong Kong's Hang Seng retreated 1.4 percent.

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AP Markets Writer Marley Jay can be reached at http://twitter.com/MarleyJayAP His work can be found at http://bigstory.ap.org/journalist/marley-jay

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