Wall Street finished mixed on Friday, as investors digested better-than-expected economic data while shares of Amazon (AMZN 1626.23, -92.50, -5.4%) fell on disappointing guidance. The S&P 500 added 0.1%, increasing its weekly gain to 1.6%.

The Dow Jones Industrial Average (+0.3%), the Nasdaq Composite (-0.3%), and the Russell 2000 (+0.2%) for their part finished with weekly gains of 1.3%, 1.4%, and 1.3%, respectively.

The S&P 500 energy (+1.8%), information technology (+0.6%), and financial (+0.5%) sectors outperformed the broader market. Conversely, the consumer discretionary (-1.8%) and real estate (-0.7%) sectors underperformed.

Stocks began the day modestly higher on the fact that the U.S. job market and the manufacturing sector did just fine in January despite the negativity surrounding market volatility, the partial government shutdown, and economic growth prospects.

Specifically, January nonfarm payrolls increased by 304,000 (Briefing.com consensus 160,000), and the January ISM Manufacturing Index improved to 56.6% (Briefing.com consensus 53.6%) from 54.3% in December.

The strong jobs data sparked selling interest in the bond market, driving yields higher, which were a drag on rate-sensitive real estate and utility stocks. The 2-yr yield rose four basis points to 2.50%, and the 10-yr yield rose six basis points to 2.69%.

Amazon, too, was a huge drag throughout the day after it disappointed investors with Q1 guidance below expectations. The company's cautious view was a reflection of growing worries about the pace of economic growth (and consumer spending) in the near future, which weighed on the consumer discretionary space. 

On the other hand, the energy sector's outsized gain was the result of higher oil prices ($55.28/bbl, +$1.51, +2.8%) and a positive reaction to earnings beats from Dow components Exxon Mobil (XOM 75.92, +2.64, +3.6%) and Chevron (CVX 118.37, +3.72, +3.2%).

Fellow Dow component Merck (MRK 76.45, +2.02) rose 2.7% after it also beat earnings expectations.

Reviewing Friday's batch of economic data, which included the Employment Situation Report for January, ISM Manufacturing Index for January, the final reading for the University of Michigan Index of Consumer Sentiment for January, Construction Spending for November, Wholesale Inventories for November:

• There is a lot to take in with the January employment, including annual benchmark revisions, the effect of the partial government shutdown on the results for the Household Survey, and a rising labor force participation rate that speaks well of the growing confidence in finding a job.
  • The key takeaway from the January report is that, even with revisions that reduced total job gains in November and December by 70,000, job gains have averaged a solid 241,000 per month over the last three months, offering some data-based justification to think this economic expansion has more room to run with consumer spending providing support.
• The ISM Manufacturing Index for January increased to 56.6% (Briefing.com consensus 53.6%) from a revised 54.3% (from 54.1%) in December.
  • The key takeaway from the report is that the January increase was driven by solid growth in New Orders and Production, which suggests the U.S. manufacturing sector is holding up well despite concerns about the pace of global growth.
• The final University of Michigan Index of Consumer Sentiment for January increased to 91.2 (Briefing.com consensus 90.7) from 90.7 in the preliminary reading.
  • The key takeaway from the report is that while the final January reading rebounded from the preliminary reading, the Consumer Expectations Index remained at its lowest level since October 2016.
• Total construction spending increased 0.8% in November (Briefing.com consensus 0.3%) on top of an upwardly revised 0.1% increase in October (from -0.1%).
  • The key takeaway from the report is that while the November increase was fueled by a rebound in residential construction, it was due to an increase in multifamily construction while construction of single family homes decreased.
• Wholesale inventories increased 0.3% in November (Briefing.com consensus 0.4%) on top of an upwardly revised 0.9% increase (from 0.8%) in October. Wholesale sales were down 0.6% following a downwardly revised 0.6% decrease (from -0.2%) in October.
  • The key takeaway from the report is that inventory growth continued exceeding sales growth, which is likely to put pressure on prices.

Looking ahead, investors will receive Factory Orders for November and auto and truck sales on Monday.

• Russell 2000 +11.4% YTD
• Nasdaq Composite +9.5% YTD
• S&P 500 +8.0% YTD
• Dow Jones Industrial Average +7.4% YTD

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