NEW YORK — The stock market wasn't sure what to make of the government's latest jobs report.
The government reported Friday morning that the U.S. added jobs in November, and stock index futures shot higher in pre-market trading. Then, as traders dived into the details of the report, their reaction became more tempered.
The Dow Jones industrial average jumped 71 points in early trading before trimming in its gains. By mid-afternoon, it was up 51 points to 13,125.
The Standard & Poor's 500 shot up, then bounced between small gains and losses. The Nasdaq opened higher, then turned negative in the morning and stayed there throughout the day.
The headline numbers from the jobs report were what sent the market higher in early trading. The Labor Department said the U.S. added 146,000 jobs last month. The unemployment rate fell to 7.7 percent from 7.9 percent, the lowest in nearly four years.
The overall report, however, painted a more restrained view of the economy.
"If you delve into that report a little more, there are some disturbing issues," said Brian Lund, who is based in Los Angeles as executive vice president and co-founder of the online brokerage Ditto Trade.
The unemployment rate fell largely because discouraged unemployed workers stopped looking for work, which meant they were no longer counted among the unemployed. Also, the Labor Department revised previously released jobs numbers downward, saying that employers added 49,000 fewer jobs in October and September than initially estimated.
Lund also wasn't so sure about the government's statement that Hurricane Sandy "did not substantively impact" the unemployment numbers. He expected Sandy's detrimental effects to show up in jobs reports over the next couple of months, as businesses figure out their post-storm plans.
"If you have Sandy, you don't automatically lose your job," Lund said. "Businesses take time to say, 'Oh, what's going on, can we go forward, do we need to cut people to survive? It's not until later that they start laying off."
At mid-afternoon, the S&P 500 was essentially flat, up less than a point at 1,414. The Nasdaq composite index, weighed down by Apple, was down 17 to 2,973.
The yield on the benchmark 10-year Treasury note rose to 1.63 percent from 1.59 percent late Thursday, a sign that investors were putting more money in stocks.
Nicholas Colas, chief market strategist for ConvergEx in New York, was similarly unimpressed by the jobs numbers. In a note to clients, he said U.S. unemployment seems to be more consistent with "an ongoing recession than expansion."
In the recession of the early 1990s and its aftermath, the highest rate of unemployment was 7.8 percent. In the recession of the early 2000s and its aftermath, the unemployment rate never got above 6.3 percent.
This time has been harsher. In late 2009, shortly after the recession officially ended, the unemployment rate peaked at 10 percent. For two years after that, it stayed above 9 percent.
There's another significant cloud hanging over the market. Congress and the White House are trying to hammer out an agreement on government spending and tax rates before Jan. 1. If they don't, lower government spending and higher taxes will kick in, a situation that's been nicknamed the "fiscal cliff."
House Speaker John Boehner said Friday there had been no progress in the negotiations, and called on President Barack Obama to produce a new offer. Earlier this week, House Republicans had released a plan that would raise tax revenues and cut government spending.
The fiscal cliff is already taking a toll on people's confidence and making them nervous about spending, said Bernie Williams, vice president of discretionary money management at USAA Investments in San Antonio, Texas. He pointed to recent announcements from retailers like Target and Kohl's, who both had November sales at established stores shrink even though analysts had expected them to rise.
"There are more things on the plate to worry about than normal," Williams said. "The consumer is weak, their confidence is being hit by the fiscal cliff, and then more importantly, you look ahead to next year and all the taxes are (likely) rising. ... If you're a paycheck-to-paycheck person, that's going to hurt."
Traders have been indecisive as well. In the 21 trading days since the presidential election, the Dow has been up 10 and down 11. So far this week, it's finished up twice and down twice.
Among stocks making big moves:
—Apple was down $14.45 to $532.79, more than 2 percent. That's part of a longer trend: Apple's stock has plunged nearly 24 percent since the iPhone 5 went on sale Sept. 21 as investors wonder whether the company can keep the momentum going with its popular iPhone and iPad devices. Apple makes up 4 percent of the S&P 500 index and nearly 12 percent of Nasdaq, so how it fares can have an enormous effect on the rest of the market.
—AIG, the bailed-out insurance company, rose 2 percent, up 68 cents to $33.94. A group of Chinese companies is in talks to buy AIG's aircraft leasing unit, which could help AIG raise cash to pay off more of its government loans.