NEW YORK — Stocks eked out a small gain Friday in a session that saw gold plunge and the dollar leap as much-better-than-expected jobs data prompted a breakdown in key risk relationships across financial markets.
Stocks struggled and other investments, including the dollar and commodities, gyrated Friday after the release of the jobs data.
Broad measures of the stock market posted solid gains in the morning but swung between gains and losses throughout the afternoon.
The Dow Jones industrial average, up more than 150 points at its intraday high, closed up 22.75 points, or 0.2 percent, at 10,388.90, boosted by gains of nearly 3 percent in Intel and nearly 2 percent in Boeing.
But the Dow was held back by a 7.2 percent decline in DuPont after it delayed the release of new high-yield corn and soybean seeds.
After an across-the-board rally in the morning, the S&P 500 ended with a 0.55 percent gain, hemmed in by a 1.2 percent decline in its basic-materials sector. The index’s energy category was off 0.8 percent.
The Nasdaq composite was up 1 percent, while the Russell 2000 was up 2.4 percent.
The U.S. Dollar Index, which tracks the greenback against a basket of six foreign currencies, also hit a one-month high, up 1.3 percent.
The dollar’s rally took a heavy toll on the prices of raw materials traded globally in terms of the greenback. Gold was particularly hard-hit because it is still treated by many investors as an alternative form of currency.
Futures on the metal snapped a four-day winning streak and suffered their largest one-day percentage decline in 20 months, off 4 percent, or $48.60, to $1,168.80 an ounce on the New York Mercantile Exchange’s Comex division.
Gold had hit a string of all-time records in recent weeks, but some traders believe that trend may not return as participants look to book profits heading into the end of the year. Even after Friday’s slide, gold was up 32.3 percent in 2009.
“You may see this being the peak for the year” for gold, said Larry Young, senior trader with Infinity Futures.
The turnaround marked a disappointing reaction to the jobs report.
It also underscored the importance of the so-called risk trade in recent months, with traders often increasing or decreasing their exposure to stocks based primarily on the cost of borrowed money, not the economy’s fundamentals.
“One of the main risks to the market right now is that the risk trade could continue to unwind in 2010,” said David Prokupek, managing partner and chief investment officer at Consumer Capital Partners in Denver. “I think the market is also telling us today that stocks are fairly valued for now,” after a rally that had already carried major indexes up nearly 60 percent from bear-market lows set in March.
