US stocks rise as investors weigh economic data

US stocks gained, offsetting the Standard & Poor’s 500 Index recent declines, as a weaker-than-estimated jobs report eased concern that the Federal Reserve may accelerate the pace of stimulus cuts.

The S&P 500 added 0.2% to 1,842.37 at 4 p.m. in New York, after falling as much as 0.3% earlier in the day. The benchmark index added 0.6% this week, paring its drop in 2014 to 0.3%. The gauge climbed 30% last year, the most since 1997. The Dow Jones Industrial Average dropped 7.71 points, or 0.1%, to 16,437.05. About 6.6 billion shares changed hands on U.S. exchanges, 8.8% above the three-month average.

Sentiment remains bullish on the outlook for stocks. However, a much weaker-than-expected rise in December nonfarm-payroll employment raised questions about the U.S. economys momentum just as many investors were feeling more confident that growth was picking up. That left stock investors unsure of the markets ability to extend its record-breaking rally in the near term.

The 74,000 gain in payrolls, followed a revised 241,000 advance the prior month, Labor Department figures showed on Friday in Washington. The median forecast of 90 economists estimated an increase of 197,000. The unemployment rate dropped to 6.7%, the lowest since October 2008, as more people left the labor force.

“The markets have been priced for everything to go perfect,” Ron Florance, the Scottsdale, Arizona-based deputy chief investment officer for Wells Fargo Private Bank, which oversees $170 billion, said by phone to Bloomberg. “This number shows us that it’s not going to be perfect. We’re still on the trajectory of recovery, but I would expect heightened volatility.”

In corporate world, Abercrombie & Fitch Co. gained 12% to $37.19. The teen-clothing retailer increased its full-year earnings prediction.

Gap Inc., which rallied 26 percent in 2013, added 1.1% to $39.84 after the retailer said annual profit may reach the upper end of its forecast.

Intercept Pharmaceuticals Inc. rallied 62% to $445.83 as a Bank of America analyst raised the biotech firm’s price target to $872 from $81. Intercept soared 281% yesterday after a trial of its liver disease drug worked well enough for the testing to be stopped.

Sears Holdings tumbled 14% to $36.71. Chief Executive Officer Edward Lampert, the company’s largest shareholder, has been shedding assets and spinning off the smaller-format stores and part of the Canadian business amid a continuing sales decline.

Chevron slid 1.9% to $121.01 for the biggest drop in the Dow. The world’s second-largest energy company by market value will report a drop in fourth-quarter profit after oil and natural gas production declined amid slumping prices.