updated 1/10/2005 8:11:40 AM ET 2005-01-10T13:11:40

Uncertain investors pushed stocks lower in a meandering session Friday as a key government jobs report failed to answer Wall Street’s lingering questions about the economy and interest rates. The major indexes ended the first week of 2005 with a loss.

Major Market Indices

Investors were unsure how to read the latest Labor Department job creation report, which showed 157,000 jobs created in December — less than the 175,000 expected, but still high enough to show continued growth in the labor market and hopefully stave off inflation and higher interest rates from the Federal Reserve.

But with wage growth slipping, according to the Labor Department, and a wave of corporate earnings releases due next week, investors remained skittish about placing large bets. The major indexes drifted in and out positive territory throughout the session before settling slightly lower.

“I think some people were looking for a bit more wage growth, better figures in the jobs report,” said Jack Caffrey, equities strategist at J.P. Morgan Private Bank. “We’re in an oversold market just catching its breath before the weekend, and after that, it’s all about earnings.”

The Dow Jones industrial average fell 18.92, or 0.18 percent, to 10,603.96.

Broader stock indicators saw modest losses. The Standard & Poor’s 500 index was down 1.70, or 0.14 percent, at 1,186.19, and the Nasdaq composite index dropped 1.39, or 0.07 percent, to 2,088.61.

The first week of 2005 was a difficult one for Wall Street, as the major indexes fell four out of the five sessions. Profit-taking from the strong rally in November and December, combined with fresh fears about inflation and higher interest rates, stole momentum from buyers and caused many investors to cash in their recent profits until new opportunities could be had.

For the week, the Dow lost 1.66 percent, the S&P fell 2.12 percent and the Nasdaq tumbled 3.99 percent.

“It seems like our clients want to be engaged, want to be investing, but they’re just not willing to step up right now,” said Brian Belski, market strategist at Piper Jaffray. “But I think it’s good people are being conservative. We’re getting the selling out of the way now, and then we can buy on the fundamentals during earnings season.”

Investors this week were primarily concerned that the Federal Reserve might hasten its plans to raise the nation’s benchmark interest rate, which stands at 2.25 percent. In the minutes of its Dec. 14 meeting, released Tuesday, the Fed raised concerns about possible inflation. Mediocre job growth, however, was seen as a buffer against faster or steeper rate hikes, since companies will likely want cheaper capital in order to create jobs.

The week’s downward trend doesn’t bode well for those who believe in the “January indicator,” a maxim that claims the market’s direction for the year can be divined by its performance over the first five days of January. While the January indicator works well for a positive week — the market has risen for the year 29 out of 34 years when the first week of trading was positive — a down week has equated to a down year only 10 out 20 years.

So if the market follows past patterns, based on the first five days of 2005, it has a 50-50 chance of ending the year with a loss.

In corporate news, health benefits company Wellpoint Inc. rose 40 cents to $115.80 after it reduced its profit outlook and warned that its revenue would come in below Wall Street forecasts. The company blamed a strong response to its debt-retirement program, which will eat into earnings but help balance the company’s books.

Taser International Inc. said it is cooperating with an informal Securities and Exchange Commission investigation into its accounting methods as well as safety claims about its non-lethal stun weapons. Taser tumbled $4.90, or 17.74 percent, to $22.72.

J.P. Morgan Chase announced it will buy trade process automator Vastera Inc. for $129 million in cash, or about $3 per share. J.P. Morgan Chase slipped 22 cents to $38.49, while Vastera surged $1, or 50 percent, to $3.

According to media reports, Sprint Corp. and British conglomerate Virgin Group are considering selling a stake in their wireless joint venture, Virgin Mobile USA, in an initial public stock offering. Sprint slipped 21 cents to $24.30.

Luxury retailer Tiffany & Co. climbed $1.20 to $31.50 after reporting a 12 percent rise in holiday sales. Luxury retailers stood out with some of the best sales figure in an otherwise lackluster season for retailers.

Declining issues outnumbered advancers by about 8 to 5 on the New York Stock Exchange, where volume was moderate.

The Russell 2000 index of smaller companies was down 6.61, or 1.07 percent, at 613.21.

Overseas, Japan’s Nikkei stock average fell 0.51 percent. In Europe, Britain’s FTSE 100 closed up 0.62 percent, France’s CAC-40 climbed 0.56 percent for the session, and Germany’s DAX index gained 0.36 percent.

© 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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