Another wild day with the Dow dropping over 130 points before noon, then steadily rise throughout the afternoon session to close 47 points down.  So what was eating at Wall Street's craw today?  Quite simply that the jobs report came in almost exactly as expected, in other words very good.  Too good -- 215,000 new jobs against a forecast of 223,000 and a 7 year low of a 5.3% unemployment rate holding steady.  Should be good news except now the market is worried once again that with the recovery coming along right on schedule, that first rate hike in 10 years will be in September.  Last week, the odds makers were putting the possibility of a September hike at 47%.  Today that went up to 52%.  Are they crazy?  Why are they completely ignoring history?  The Fed never pulls big surprises like that.  If there was no announcement of a hike at the July meeting, any such hike will certainly be coming now after September.  Why can't all these geniuses see that?  The real concern is that the positive earnings reports are based on cost cutting and stock repurchases rather than sales so many are worried about valuations.  But has this not been the trend for a few years now?  Again, where's the rationale?  At least it's in the minority, if only slightly so.  At 6.7 billion shares, volume was just a little under this week's averages.

Markets | Fri Aug 7, 2015 4:35pm EDT

Wall St drops as jobs report augurs for September rate hike

By Noel Randewich

DJ:    17,373.38  -46.37      NAS:      5,043.54  -12.90           S&P:      2,077.57  -5.99

Aug 7 (Reuters) - U.S. stocks ended lower on Friday after solid job growth data for July pried the door open a little wider for a potential interest rate hike by the Federal Reserve in September.

Wall Street took the latest signs of an improving economy as a fresh reason to sell shares in a market that has remained range-bound for much of 2015 in anticipation of the Fed's first rate hike in nearly 10 years.

U.S. nonfarm payrolls increased 215,000 last month, less than the 223,000 forecast by economists, but the unemployment rate held at a seven-year low of 5.3 percent.

U.S. overnight indexed swap rates rose after the jobs data, suggesting traders were pricing a 52 percent chance that rates would be raised in September rather than December, up from 47 percent prior to the data, according to John Briggs, head of cross-asset strategy at RBS Securities Inc in Stamford, Connecticut.

"It's enough to keep the Fed on track to raise rates in September but it's not enough to end the debate," said Briggs.

The Dow Jones industrial average fell 0.27 percent to end at 17,373.38. The S&P 500 lost 0.29 percent to 2,077.57 and the Nasdaq Composite finished 0.26 percent lower at 5,043.54.

For the week, the Dow lost 1.8 percent, the Nasdaq dipped 1.7 percent and the S&P edged down 1.2 percent. After hitting a record high in May, the S&P 500 is now up less than 1 percent for the year.

On Friday, seven of the 10 major S&P sectors were lower, with the energy index's 1.86 percent fall leading the decliners as oil prices headed for a sixth week of losses.

Exxon Mobil's 1.61 percent drop weighed the most on the S&P 500.

With second-quarter earnings season almost over, S&P 500 companies' aggregate profits are estimated to have increased 1.6 percent, while revenues are projected to have fallen 3.4 percent, according to Thomson Reuters data.

With many U.S. companies boosting their earnings per share by cutting costs and buying back stock instead of by growing their businesses, stock valuations remain a concern. TheS&P 500 trades at 16.6 times expected earnings, which is pricier than the 10-year median of 14.7.

Cablevision Systems' shares fell 2.68 percent after the company managed to stem video subscriber losses, but at the cost of margins.

Nvidia's shares surged 12.37 percent a day after the chipmaker reported a surprise rise in quarterly revenue, helped by strong demand for its graphic chips for high-end video game computers.

Decliners outnumbered advancers on the NYSE by 1,800 to 1,262. On the Nasdaq, 1,701 issues fell and 1,088 advanced.

The S&P 500 index chalked up four new 52-week highs and 20 new lows; the NasdaqComposite saw 27 new highs and 161 new lows.

About 6.7 billion shares changed hands on all U.S. exchanges, under an average 7.0 billion in the past five sessions, according to BATS Global Markets data.