US STOCKS-Wall St flat as profit-taking offsets jobs data

* U.S. non-farm payrolls surge in October

* Shares of financials lead gainers

* Stocks: Dow, Nasdaq down 0.2 pct, S&P up 0.1 pct

* For up-to-the-minute market news see [STXNEWS/US]
(Updates to midday)

By Caroline Valetkevitch

NEW YORK, Nov 5 (BestGrowthStock) – U.S. stocks (Read more about the stock market today. ) were little changed
on Friday as stronger-than-expected U.S. job gains in October
were offset by profit-taking after the market rallied to
two-year highs.

Financial shares led gainers on speculation big banks would
increase dividend payments, while telecommunications shares had
the biggest losses.

This week’s rally came in the wake of the Federal Reserve’s
announcement Wednesday to buy $600 billion in government bonds
to help the ailing economy.

Investors questioned how long the rally could continue
after the week’s market-bullish events.

“The stock market has been relatively good this week, so
maybe some sectors are taking a pause,” said Thomas Villalta,
portfolio manager for Jones Villalta Asset Management in
Austin, Texas. The S&P 500 is up 3.2 percent so far for the
week.

But the employment gains bode well for the months ahead
when consumer spending takes center stage during the holiday
shopping period, he said.

“The employment situation comes on top of what were fairly
good retail sales figures for October, so those two, hand in
hand, are painting a picture that would seem to support the
assertion that this will be at least an OK holiday season.”

The Dow Jones industrial average (.DJI: ) was down 19.26
points, or 0.17 percent, at 11,415.58. The Standard & Poor’s
500 Index (.SPX: ) was up 1.27 points, or 0.10 percent, at
1,222.33. The Nasdaq Composite Index (.IXIC: ) was down 4.06
points, or 0.16 percent, at 2,573.28.

Many retailers posted stronger-than-expected sales on
Thursday when the Dow and S&P 500 hit their highest levels
since September 2008 and the Nasdaq rose to its highest since
January 2008. The S&P 500 now is up about 16 percent since the
end of August.

Republican gains in the U.S. midterm election on Tuesday
added to bullish sentiment in stocks, as investors viewed the
change as positive for profit growth.

On Friday, the S&P telecommunications (.GSPL: ) and health
care sectors (.GSPA: ) led the downdraft, with losses of 0.8
percent and 0.7 percent, respectively.

“Taking profits has been the wrong move for a while.
There’s a lot of liquidity out there. Earnings have been strong
and many stocks are still reasonably priced, so it’s a fairly
good environment for equities given the fact that a lot of
other asset choices are relatively more expensive,” said Sasha
Kostadinov, portfolio manager at Shaker Investments in
Cleveland.

Financials substantially outperformed other sectors, with
the S&P financial index (.GSPF: ) advancing 1.8 percent. The Fed
is expected to soon allow some healthy banks to increase
dividend payments, people familiar with the decision said late
Thursday.

Shares of Bank of America (BAC.N: ) shot up 3.5 percent to
$12.55.

Boosting optimism about the economy, U.S. employment jumped
by much more than expected last month, with private companies
hired workers at the fastest pace since April, the government
report showed.

The strength of the report even raised questions about
whether the Fed was too aggressive in its move to keep the
economy growing.

“That employment report was really good today. Is there
justification to buy $900 billion (in total) in debt?,”
Villalta said.

“I don’t think it hurts for the Fed to be doing what
they’re doing if it acts as an insurance policy that we’re on
track,” he said. The unemployment rate remained high at 9.6
percent in Friday’s report, signaling the labor market still
has far to go, he added.
(Reporting by Caroline Valetkevitch; Editing by Kenneth
Barry)

US STOCKS-Wall St flat as profit-taking offsets jobs data