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The U.S economy kept up hiring at a moderate pace in December, giving benchmarks a lift on Friday. The S&P 500 closed at its highest level since 2007 following a resolution to the Fiscal Cliff dilemma and a positive government jobs report. Meanwhile, factory orders were stable in November while the ISM Services Index climbed last month. The technology sector was the only loser among the S&P 500 industry groups.

The Dow Jones Industrial Average (DJI) gained 0.3% to close the day at 13,435.21. The Standard & Poor 500 (S&P 500) surged 0.5% to finish Friday’s trading session at 1,466.47. The tech-laden Nasdaq Composite Index added 0.04% to end at 3,101.66.The fear-gauge CBOE Volatility Index (VIX) plunged 5.0% to settle at 13.83. Consolidated volumes on the New York Stock Exchange, American Stock Exchange and Nasdaq were roughly 6.07 billion shares, lower than the daily average of 6.42 billion shares. Advancing stocks easily outpaced decliners on the NYSE; as for 71% stocks that rose, only 26% stocks moved lower.

Benchmarks finished the first week of the year on a high note. The Dow Jones gained 3.8%, S&P 500 surged 4.6% and Nasdaq jumped 4.8% over the week. The blue-chip index recorded its best weekly gains since June 2012. Stocks rallied during the previous week after lawmakers managed to seal a deal on the Fiscal Cliff issue, preventing the economy from sinking back into a recession. The bullish sentiment in the markets dragged the VIX, the market’s fear gauge lower for the fourth consecutive day. The VIX plunged nearly 40% in the previous week, logged its biggest ever weekly decline.

The U.S. Bureau of Labor Statistics reported that total nonfarm payroll employment surged by 155,000 in December, beating consensus estimates of 144,000. The increase in nonfarm payroll employment was due to gains by health care, food services and drinking places, construction, and manufacturing. Health care added 45,000 more jobs, whereas food services and drinking places accounted for 38,000 new jobs. Employment in construction and manufacturing also increased 30,000 and 25,000 respectively. The unemployment rate came in flat at 7.8% in December. This was below consensus estimates of 7.7%.

Additionally, the U.S department of commerce reported factory orders in November were unchanged from the previous month. This was contrary to consensus estimates of an increase of 0.4% in November. According to the report, new orders surged $0.2 billion to $477.6 billion. Shipments gained 0.4% to $483.7 billion, whereas unfilled orders added 0.1% to $984.5 billion. Orders for inventories declined marginally to $615.2 billion.

The Institute of Supply Management said the non-manufacturing sector expanded in December. According to the report, the ISM Services Index increased to 56.1 in December from 54.7 in November. This was above consensus estimates of 54.5. New orders gained 1.2% to 59.3 whereas the employment index gained 6.0% to 56.3. However, the business index declined 0.9% to 60.3.

Technology bellwether Apple Inc. (NASDAQ:AAPL) lost 2.8% and was largely responsible for dragging the sector lower on Friday. Apple had lost almost 25% since touching an all time high in September. The Technology SPDR (XLK) lost 0.5%. Stocks such as Microsoft Corporation (NASDAQ:MSFT), International Business Machines Corp. (NYSE:IBM), Intel Corporation (NASDAQ:INTC) and Texas Instruments Incorporated (NASDAQ:TXN) slipped 1.9%, 0.7%, 0.8% and 0.2%, respectively.
 

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