Stock markets end the day mixed after wild swings
The broader Standard & Poor's 500 index finished the day down 0.1%, at 1,199.36.
The modest final results of the day belied the drama that came before.
Before the markets opened, the government announced that the economy had added a better-than-expected 117,000 jobs in July, enough to bring the unemployment rate down one tick to 9.1%. That gave brief encouragement to traders as the markets opened with the Dow rising nearly 150 points, but pessimism soon set in, dragging the index down more than 200 points.
Things turned around after President Obama gave an encouraging speech about the economy and a news report suggested that the European Central Bank may take steps to help shore up the debt crisis in Italy and Spain. Together it was enough to motivate a quick 400-point rise.
As the day went on, though, the optimism faded again, and the leading indexes settled back down.
"There’s just so much uncertainty, and every bit of news is causing incredible volatility," said Ryan Detrick, an analyst at Schaeffer's Investment Research.
Smaller stocks lost more ground than blue chips. The Russell 2,000 small-stock index slid 1.7%.
The markets reflect the wide disagreement among investors about the meaning of the decline in stock indexes over the last two weeks.
A growing number of economists have said the United States could be headed back into recession, pointing to the recent drop in consumer spending and the continuing drag of debt on the U.S. and European economies.
Yields on U.S. Treasury bonds jumped Friday, in part as fears returned that the Standard & Poor's rating agency may drop the U.S. rating from the current triple-A. The 10-year T-note yield rose to 2.56% after falling to 2.40% on Thursday, the lowest since last fall.
Another camp has said the economy's weakness is likely to be temporary, encouraging ordinary investors to hold onto stocks. The speculation about the European Central Bank's plans to help Italy and Spain gave hope that the markets there may recover.
-- Nathaniel Popper
Photo: Jin Lee / Associated Press