Wall St. ends down on interest rate, Greece jitters

Investors really do have to decide whether they want a recovery or not.  This happens over and over.  Today's employment numbers came in much better than expected, once again indicating solid progress in the recovery.  But that also means that the Fed may decide to start increasing interest rates sooner than expected, keeping in mind that interest rates have been kept low specifically for the purpose of stimulating the recovery.  It has always been the plan to start raising interest rates again as the economy continued gaining strength.  But everytime there is good news, the market takes it as a negative since an interest rate hike might dampen this historic bull market we've been in for some time.  So even though the Fed has made no indication that it plans to raise interest rates sooner than next fall, the market still fears it might be sooner.  Thus whenever good news comes along as it did today, the reaction is a sell-off, this time to the tune of 120 some points but recovering in the last hour of trading to end down 60 points.  The strong employment numbers also indicated that two million new people who had previously given up, now sufficiently encouraged by the growing job market, had rejoined the labor force and, though more jobs had been added, this expansion caused the unemployment rate to go up to 5.7%.  There was also more tension from Europe.  As noted yesterday, though investors were elated by Greece's new proposal to pay off its debt, it was still not known whether the ECB was on board.  Today we found out -- it's not on board, at least not yet.  On February 11th, the Greek banks will meet with the ECB's finance ministers to present the details of their proposal.  If at that time the terms are found to be acceptable, Greece will have just five more days to apply for the needed extension or lose it.  So once again, next week all eyes will be on Greece.  Volume was high at 7.7 billion shares.

Wall St. ends down on interest rate, Greece jitters
BY CAROLINE VALETKEVITCH

DJ:     17,824.29  -60.59       NAS:   4,744.40  -20.70       S&P:      2,055.47  -7.05

NEW YORK Fri Feb 6, 2015 5:01pm EST

(Reuters) - Wall Street stocks fell on Friday as a better-than-expected U.S. jobs report raised expectations that the Federal Reserve will increase interest rates by midyear, while renewed worries over Greece's debt negotiations added to the bearish tone.

The S&P 500 index of utilities .SPLRCU, often used as a bond proxy by investors in a low-rate environment, fell 4.1 percent, its biggest daily drop since August 2011, as U.S. government debt yields jumped.

In another sign of concern about interest rates, Simon Properties (SPG.N), a real estate investment trust, sank 4 percent at $195.08.

But the financial sector .SPSY, which tends to benefit from rising interest rates, rose 0.7 percent.

Still, all three major indexes registered strong gains for the week, with the Dow industrials rising 3.8 percent for its biggest weekly gain since January 2013.

Nonfarm payrolls increased more than expected in January and wages rebounded, while employment numbers for November and December were revised sharply higher, the U.S. Labor Department reported. The unemployment rate ticked up to 5.7 percent as a result of an increased labor force.

After the report, traders added to bets that the U.S. central bank will start to hike interest rates by midyear.

"With the stronger-than-anticipated employment report, there's discussion the Fed might move earlier rather than later ... so we've seen the financial sector do well and the interest rate-sensitive utilities sector do poorly," said Bucky Hellwig, senior vice president at BB&T Wealth Management in Birmingham, Alabama.

Adding to that, "the negotiations on the Greek debt weighed on the market this afternoon," he said.

Euro zone finance ministers are waiting to hear on Feb. 11 how Greece wants to become financially independent, the chairman of the ministers said. Greece must apply for a bailout extension by Feb. 16 at the latest to ensure that the euro zone keeps backing it financially, the Eurogroup chairman told Reuters.

The Wall Street Journal on Friday said Greece was rebuffed by lenders for $5 billion in short-term debt; the country is facing a cash crunch because the EU wants more reforms.

The Dow Jones industrial average .DJI fell 60.59 points, or 0.34 percent, to 17,824.29, theS&P 500 .SPX lost 7.05 points, or 0.34 percent, to 2,055.47,, and the Nasdaq Composite.IXIC dropped 20.70 points, or 0.43 percent, to 4,744.40.

For the week, the S&P 500 was up 3 percent, its best weekly gain since December, while theNasdaq was up 2.4 percent.

About 7.7 billion shares changed hands on U.S. exchanges, compared with the 7.9 billion average for the last five sessions, according to data from BATS Global Markets.

Among the day's gainers, Twitter (TWTR.N) jumped 16.4 percent to $48.01 after any earnings report on Thursday that beat Wall Street's profit and revenue targets in the fourth quarter.

Declining issues outnumbered advancing ones on the New York Stock Exchange by 1,961 to 1,128, for a 1.74-to-1 ratio on the downside. On the Nasdaq, 1,458 issues fell and 1,260 advanced for a 1.16-to-1 ratio favoring decliners.

The benchmark S&P 500 index posted 43 new 52-week highs and two new lows; theNasdaq Composite recorded 99 new highs and 26 new lows.