U.S. jobs were again at the focus of the markets as the BLS report drove stocks during Friday’s session. The key release showed that only 115,000 jobs were created, well below the consensus expectation of 165,000.
Beyond this, private payrolls also came in well below expectations, missing the mark by about 48,000 jobs. However, the unemployment rate did fall down to 8.1% from the previous reading of 8.2%, although much of this reduction could be due to jobseekers leaving the workforce.
Given the gloominess of the report and the other poor economic data earlier in the week, stocks sold off once again to close out the worst week of 2012 so far. The Dow fell by about 1.3% while the S&P 500 slid by 1.6% and the tech-heavy Nasdaq slumped by 2.3% in Friday trading.
Losses were pretty much across the board, although banking and big tech led the way lower, closely followed by basic materials and industrials. Seemingly the only sectors that held up were in the utilities and consumer goods space, although many of these securities finished in the red as well (see The Comprehensive Guide To Brazil ETFs).
Thanks to this turn for the worse, traders once again sought out safety in the bond market as the benchmark ten-year note fell below the 1.9% mark in Friday trading. The U.S. dollar also rose on the day, helped by gains against the major European currencies, although weakness was seen against the yen to close out the week.
This dollar strength helped to hammer commodity markets yet again, as broad losses hit this risk sensitive market. All of the energy commodities retreated by at least 2.0% on the day while softs also finished lower too. Metals were more mixed as most products finished close to breakeven although gold and silver did finish in the green in Friday trading.
ETF trading was surprisingly heavy in Friday’s session, breaking the trend of light trading that investors saw earlier in the week. Pretty much all the major products saw outsized activity on the day, but especially so in funds tracking the Nasdaq, commodities, and U.S. sectors.
In particular, the iShares Dow Jones US Consumer Goods Sector ETF (IYK - ETF report) was an active fund in Friday trading as investors sought greater safety in their equity exposure. The product usually sees volume of about 42,000 shares but experienced a modest spike to 89,200 in today’s session (see Top Three Consumer Staples ETFs).
The product has close to three-fourths of its assets in consumer staples including heavy positions in firms like Procter & Gamble (PG - Analyst Report) and Coca-Cola (KO - Analyst Report). Staple firms like these held up better than most in today’s session, allowing the product to fall by about 1% on what was a pretty negative day overall in the markets.
Another ETF which experienced a boost in volume was the United States Oil Fund (USO - ETF report). This popular product—which has over $1.2 billion in AUM—usually sees volume of about 9.7 million shares a day but saw levels soar to just over 20 million in Friday trading (read Is An Oil Sands ETF On The Horizon?).
Undoubtedly, a great deal of this trading activity came thanks to the negative commodity reaction to the jobs report which suggested to many that less robust demand was on the horizon. This sentiment greatly impacted this popular way to play the oil markets as the product slid by nearly 4% ahead of the weekend.
(see more on ETFs in the Zacks ETF Center)