The lunacy continues with the Dow dropping 80 points right out the gate, then soaring 120 points in the next couple of hours before beginning a gradual descent all afternoon to close 56 points down.  Can you guess what happened?  Indeed, as was forecast yesterday, the market feared the May jobs report was going to be very strong with an expected gain of 225,000 new jobs.  In fact, it came in remarkably strong at 280,000 in addition to which March and April numbers were revised upwards another 32,000 jobs for a total of 312,000 new jobs.  The unemployment rate rose slightly from 5.4 to 5.5% only because there is so much good news out there that many more jobless have now entered the market with new confidence in their prospects.  So at first there was elation that the recovery was humming along so well, then the inevitable realization that always takes place after good news that a September rate hike now seems rather certain.  Bear in mind that for months now the market has been expecting and prepared for a September hike, that the real fear was for a June hike, which is obviously now a non-issue.  Thus the fearmongers drove the market down 176 points from its high, especially when the President of the New York Fed confirmed the long held policy position that the economy could indeed handle a hike later this year.  So the seesaw continues but, happily, with the same players as volume was right on average at 6.2 billion.  There are a small number of players who are moving stocks right now as the rest remain on the sidelines waiting for things to settle down, which will likely not be for a while.

Markets | Fri Jun 5, 2015 6:20pm EDT

Strong jobs report gives Wall St. second straight losing week

BY CAROLINE VALETKEVITCH

DJ:    17,849.46  -56.12      NAS:      5,068.46  +9.33       S&P:      2,092.83  -3.01

(Reuters) The Dow and S&P 500 eased on Friday as increasing expectations the Federal Reserve could raise rates as soon as September offset optimism over a recovery in the U.S. labor market.

Stronger-than-expected jobs data for May and a pickup in wages were the latest signs of better momentum in the economy.

Wall Street's top banks said they expect the Fed to begin raising interest rates in September, followed by another increase before the end of the year, according to a Reuters poll.

"The market is excited about stronger jobs and higher wages, but before (investors) can pop the cork of the champagne bottle, they start thinking about the hangover, which is higher interest rates," said Eric Kuby, chief investment officer at North Star Investment Management in Chicago.

"I think everyone is just waiting to see what happens when rates do start to rise."

The S&P utilities index .SPLRCU, which includes top dividend payers that tend to fall as prospects for higher rates rise, was down 1.3 percent and among the weakest-performing sectors. The U.S. benchmark bond yield hit its highest since October.

S&P financials .SPSY, which benefit from higher rates, were up 0.6 percent, among the day's best performing sectors, while the S&P energy index .SPNY added 0.7 percent. Energy shares bounced with oil prices.

The Dow Jones industrial average .DJI fell 56.12 points, or 0.31 percent, to 17,849.46, theS&P 500 .SPX lost 3.01 points, or 0.14 percent, to 2,092.83 and the Nasdaq Composite.IXIC added 9.33 points, or 0.18 percent, to 5,068.46.

For the week, the S&P 500 fell 0.7 percent, its second straight week of losses, the Dow was down 0.9 percent and the Nasdaq was down 0.03 percent.

The Fed has kept overnight rates near zero since December 2008 because the economic recovery has been slow. Cheap credit, however, has helped bolster the U.S. stock market.

New York Fed President William Dudley said he was concerned the economy may not be growing fast enough to absorb the slack among workers sidelined by the financial crisis. Still, Dudley said he expects the Fed would be in a position to raise rates later this year.

Boosting the Nasdaq, shares of Regeneron Pharmaceuticals Inc (REGN.O) rose 4 percent to $539.40 after a preliminary FDA review of an experimental drug it makes with Sanofi SA (SASY.PA).

Among decliners on Friday were gold miners, which dropped along with gold prices. Shares of Newmont Mining (NEM.N) were down 3.3 percent at $25.91.

Zumiez (ZUMZ.O) dropped 19.3 percent to $24 as it estimated current-quarter profit and revenue below analysts' expectations.

NYSE decliners outnumbered advancers 1,629 to 1,426, for a 1.14-to-1 ratio; on the Nasdaq, 1,782 issues rose and 962 fell, for a 1.85-to-1 ratio favoring advancers.

The S&P 500 posted 16 new 52-week highs and six new lows; the Nasdaq Composite recorded 117 new highs and 42 new lows.

About 6.2 billion shares changed hands on U.S. exchanges, slightly below the 6.3 billion daily average for the last five sessions, according to BATS Global Markets.