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Midday Update: Soft Labor Market and Services Sector Data Fails to Dent U.S. Stock Market Rally

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U.S. stocks were at record highs for a third straight day, led by gains in tech and retail shares, as Wall Street shrugged off an underwhelming labor market report and unexpected drop in an index measuring the largest sector of the U.S. economy.

The economy created 148,000 new jobs in December as harsh winter weather affected job growth across most of the country. This was below expectations for a 191,000 increase, and significantly down from the 252,000 new jobs created in November. But wages increased by 0.3%, and the jobless rate stuck to 17-year low of 4.1%, giving investors little reason to lose confidence in either the U.S. economy or bull run on Wall Street.

Market participants were also unmoved by a decline in the Institute for Supply Management services sector index. Led by a 4.4% fall in new orders, the ISM December index was down to a four-month low of 55.9 from November's 57.4, missing expectations for a slight gain to 57.6. Analysts blamed the weakness to seasonal influences as well as rising prices for raw materials due to California wildfires (lumber) and tariffs on Vietnamese steel.

Eclipsed by the labor market report was an increase in the US's trade deficit to a six-year high of $50.5 billion, and better-than-expected increase of 1.3% in November factory orders.

Separately, the Fed should only raise interest rates twice this year with inflation unlikely to hit the 2% target rate until 2019, Philadelphia Fed president Patrick Harker said in a speech Friday. Harker is not a voting member of the Fed this year.

European bourses ended the week higher on bullish German retail sales, continued strength in automaker shares, and in tandem with gains in U.S. markets. Gains across the EU drove Germany's DAX to its first weekly gain in four weeks, aided by a weaker euro

Crude oil was down $0.66 to $61.35 per barrel. Natural gas was down $0.10 to $2.78 per 1 million BTU. Gold was up $0.40 to $1,322.00 an ounce, while silver was up $0.03 to $17.29 an ounce. Copper was down $0.03 to $3.23 per pound.

Among energy ETFs, the United States Oil Fund was down 0.81% to $12.27 with the United States Natural Gas Fund was down 2.91% to $22.02. Amongst precious-metal funds, the Market Vectors Gold Miners ETF was up 0.02% to 23.71 while SPDR Gold Shares was down 0.06% to $125.38. The iShares Silver Trust was up 0.25% to $16.27.

Here's where the markets stand at mid-day:

US MARKETS

NYSE Composite Index was up 35.01 points (+0.27%) to 13,063.47

Dow Jones Industrial Index was up 95.58 points (+0.38%) to 25,170.71

S&P 500 was up 9.77 points (+0.36%) to 2,733.78

Nasdaq Composite Index was up 45.35 points (+0.64%) to 7,123.25

GLOBAL SENTIMENT

FTSE 100 was up 28.34 points (+0.37%) to 7,724.22

DAX was up 151.75 points (+1.15%) to 13,319.64

CAC 40 was up 57.06 points (+1.05%) to 5,470.75

Nikkei 225 was up 208.20 points (+0.89%) to 23,714.53

Hang Seng Index was up 78.16 points (+0.25%) to 30.814.64

Shanghai China Composite Index was up 6.65 points (+0.20%) to 3,392.36

NYSE SECTOR INDICES

NYSE Energy Sector Index was down 48.84 points (+0.27%) to 18,005.00

NYSE Financial Sector Index was down 1.13 points (-0.01%) to 12,806.64

NYSE Healthcare Sector Index was up 142.32 points (+0.69%) to 20,761.74

UPSIDE MOVERS

(+) TIG (+70.36%) Received $26.5 million takeover offer from Takeda Pharmaceutical

(+) CNIT (+56.44%) Extending gains tied to ad terminal sales

(+) ZFGN (+7.02%) Completes enrollment for clinical trial of type 2 diabetes drug

DOWNSIDE MOVERS:

(-) OHRP (-81.18%) Failed to meet main efficacy objective in MAKO trial

(-) FRAN (-19.93%) Lowers Q4 outlook to below market expectations

(-) RGNX (-14.91%) Cash burn is expected to be as high as 48.4% in 2018 as a result of "robust" pipeline of candidate

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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