US shares erased big losses at the close on Friday, with technology stocks leading the advance. The DJIA closed 10 points higher at 10012.23, having fallen as low as 9835 earlier. The S&P500 rose 3.08 points to close at 1066.19, and the Nasdaq added 15.69 points to finish at 2141.12. Stocks fell sharply in the afternoon as worries about a growing debt crisis in Europe exacerbated uncertainty about the US economic outlook. But the market changed direction, as the dollar trimmed bigger gains and some of the selling pressure gave way.
Worries about the Euro zone caused investors to drop riskier assets and seek the US dollar and government debt. The dollar rose to a more than 6 month high versus the euro and also gained against the yen. The dollar's strength then dragged on commodity prices, oil and gold stocks and companies and sectors that have benefited from a weaker dollar. Strength in tech stocks such as Cisco Systems, Microsoft and Intel helped temper broader losses and eventually led a comeback.
In company news, Goldman Sachs has surprised Wall Street by announcing that it is paying CEO Lloyds Blankfein $9m in company restricted stock as his bonus. He was expected to receive a much larger payment. Earlier, JPMorgan said CEO Jamie Dimon was given a $16m bonus last year, in restricted stock and options.
Toyota's chief executive apologized Friday for the recall of 8 million cars. However, he did not announce a new recall of the Prius Hybrid, despite reports of brake problems. Earlier the company said it is also examining the brake systems of the Lexus Hybrid vehicles since they used the same system as the 2010 Prius. The stock gained 3.5 percent.
In economic news, the Labor Department reported that employers cut 20,000 from their payrolls last month. Employers had been expected to add about 15,000 jobs. Employers cut a bigger than initially reported 15,000 jobs from their payrolls in December. The January report had some positive signs, including an increase in the work week and an increase in temp agency employment. But the report also showed that the impact of the recession on the labor market was far worse than initially reported. The unemployment rate fell to 9.7 percent from 10 percent in December. Economists expected it to hold steady at 10 percent.
COMEX gold for April delivery fell $10.20 to close at $1052.80 an ounce.
US light crude for March delivery fell $1.95 to close at $71.19 a barrel on NYMEX.
Treasury prices rose, lowering the yield on the 10 year note to 3.54 percent from 3.61 percent.
The Nikkei average fell 1.1 percent to a two month closing low today, with exporters such as Sony Corp hurt by a stronger yen, while anxiety over fiscal problems in Europe continued to dent investor confidence. Beer maker Kirin Holdings slid more than 7 percent after saying that it and fellow beer maker Suntory had scrapped a plan to create one of the world's largest goods and beverage makers, citing differences over governance and a merger ratio. The Nikkei closed 105.27 points lower at 9951.82, its first close below 10,000 since December 10.
UK stocks closed lower on Friday on fears over the health of the global recovery as US employment data failed to impress, while ICAP fell following a warning on profits. ICAP fell by nearly 20 percent, after the company said full year earnings would miss analysts’ expectations. The FTSE100 closed 78.39 points lower at 5060.92. Energy stocks were lower, with BG Group 3.2 percent lower after its fourth quarter earnings, excluding non operations, missed expectations. Royal Dutch Shell and BP fell 0.9 percent. Miners were also under pressure and as metals prices retreated, investors turned to the dollar as a safe haven. Sterling fell to an eight and a half month low against the dollar as concerns over euro zone sovereign debt problems boosted the appeal of the currency. Xstrata and Randgold Resources were 5.2 and 2 percent lower ahead of results today.
Banks were lower, with Barclays, HSBC, Lloyds Banking Group, Standard Chartered and RBS were 1.2 to 5.7 percent lower.
BAE Systems rose 1.6 percent, after the company reached a settlement with the US and the UK that will see it pay total fines of around $450m, and draws a line under a long running corruption investigation on both sides of the Atlantic.
Compass rose 5.1 percent after the company said it made a good start to its current fiscal year, with its rate of sales decline slowing and its pipeline of new business remaining strong.