NEW YORK - A robust run of US economic data this week was not enough to prevent the Dow and the S&P 500 from snapping an eight-week winning streak.
But the stock markets' sharp rally Friday after a much stronger-than-expected jobs report suggested that investors may be growing comfortable with the idea of the Federal Reserve cutting back its huge stimulus as the economy improves.
Over the five days of trade, the Dow Jones Industrial Average fell 0.41 per cent to 16,020.20 points.
The S&P 500 index, a broad measure of the markets, slipped a bare 0.04 per cent to 1,805.09 points.
And the tech-rich Nasdaq Composite edged up 0.06 per cent to 4,062.52 points.
The Labor Department's highly anticipated November jobs report came ahead of the Fed's December 17-18 Federal Open Market policy meeting. Unemployment dropped to a rate of 7.0 per cent, a five-year low, from 7.3 per cent in October, and the economy added 203,000 jobs.
"The final employment report of the year was generally stronger than expected, raising speculation that the FOMC might begin to reduce the pace of asset purchases in December," Nomura analysts said in a research note.
Some analysts said the Fed would likely wait for additional positive data before they start tapering US$85 billion (S$106 billion) a month in bond purchases, aimed at boosting economic growth.
"While there was some talk that the encouraging job growth raised the odds of the Fed announcing a tapering at its December meeting, the message of the markets today was either that it didn't believe there would be a tapering this month or that it doesn't fear a tapering this month," Briefing.com said in a market note.
On Thursday, stocks fell after an unexpectedly sharp upward revision to third-quarter economic growth to an annual rate of 3.6 per cent from an initial estimate of 2.8 per cent on Thursday also raised expectations of a Fed taper.
Other economic reports in the data-packed week were mostly positive, including a stronger-than-expected ISM reading on manufacturing activity, and a spike in new-home sales in October that was the biggest monthly increase in 33 years.
The Fed's Beige Book report on current economic conditions showed that the US economy continues to grow steadily, with gains in all regions and most industries.
Auto sales in November hit their fastest pace since 2007, raising expectations for a strong retail sales number on Thursday, the only major data on next week's economic calendar.