Stocks end mixed as investors assess strong job report and interest rate increase

Stocks had a mixed reaction Friday to the surprisingly strong October job report as investors adjusted to the prospect of higher interest rates as early as next month.

The big indexes, on the surface, had a muted reaction to the job numbers, but a look at the individual parts of the market showed investors were actively reshuffling their portfolios.

Dividend-paying stocks, typically bought for their higher-than-average payouts when interest rates and bond yields are low, dropped sharply Friday. The Dow Jones utility index, a basket of 15 dividend-paying utility stocks, sank 4 percent.

In contrast, bank stocks rose sharply as investors bet that higher interest rates would translate into higher profits, since they may be able to charge more for lending. JPMorgan Chase rose $2.02, or 3 percent, to $68.46. Bank of America rose 64 cents, or 3.7 percent, to $17.95. Morgan Stanley rose $1.53, or 4.5 percent, to $35.41.

The October job gain of 271,000 topped all expectations and “makes it pretty likely the Fed will raise rates in December,” said Priscilla Hancock, a global fixed income strategist for J.P. Morgan Asset Management.

The Dow Jones industrial average rose 46.90, or 0.26 percent, to 17,910.33. The Standard & Poor’s 500 index fell 0.73, or 0.03 percent, to 2,099.20. The Nasdaq composite rose 19.38, or 0.38 percent, to 5,147.12.

This story was originally published November 6, 2015 at 4:55 PM with the headline "Stocks end mixed as investors assess strong job report and interest rate increase."