* U.S. employers added 155,000 jobs in Dec
* Apple shares fall after report on Samsung smartphones
* S&P 500 nears largest weekly gain in over year
* Indexes up: Dow 0.33 pct, S&P 0.49 pct, Nasdaq up 0.04 pct
By Chuck Mikolajczak
NEW YORK, Jan 4 (Reuters) - The benchmark Standard & Poor's
500 index ended at a five-year high on Friday, lifted by reports
showing employers kept up a steady pace of hiring workers and
the vast services sector expanded at a brisk rate.
The gains on the S&P 500 pushed the index to its highest
close since December 2007 and its biggest weekly gain since
Most of the gains came early in in the holiday-shortened
week, including the largest one-day rise for the index in more
than a year on Wednesday after politicians struck a deal to
avert the "fiscal cliff."
The Dow Jones industrial average gained 43.85 points,
or 0.33 percent, to 13,435.21. The Standard & Poor's 500 Index
rose 7.10 points, or 0.49 percent, to 1,466.47. The
Nasdaq Composite Index edged up 1.09 points, or 0.04
percent, to 3,101.66.
For the week, the S&P gained 4.6 percent, the Dow rose 3.8
percent and the Nasdaq jumped 4.8 percent to post their largest
weekly percentage gains in more than a year.
The CBOE Volatility index, a measure of investor
anxiety, dropped for a fourth straight session, giving the index
a weekly decline of nearly 40 percent, its biggest weekly fall
ever. The close of 13.83 on the VIX marks its lowest level since
In Friday's economic reports, the Labor Department said
non-farm payrolls grew by 155,000 jobs last month, slightly
below November's level. Gains were distributed broadly
throughout the economy, from manufacturing and construction to
Also serving to boost equities was data from the Institute
for Supply Management showing U.S. service sector activity
expanding the most in 10 months.
With the S&P 500 index at a five-year closing high, analysts
said any gains above the index's intraday high near 1,475 in
September may be harder to come by.
"We are getting to a point where we need a strong catalyst,
which could be earnings, it could be three months of good
economic data, it could be a variety of things," said Adam
Thurgood, managing director at HighTower Advisors in Las Vegas,
"What is going on right now is this conflicting view of
fundamentals look pretty good and improving, and then you've got
these negative tail risks that could blow everything up,"
He referred to "a fiscal superstorm brewing" of issues still
left unresolved in Washington, including tough federal budget
cuts and the need to raise the government's debt ceiling all
within a couple of months.
The rise in payrolls shown by the jobs data did not make a
dent in the U.S. unemployment rate still at 7.8 percent.
A Reuters poll on Friday of economists at Wall Street's top
financial institutions showed that most expect the Fed in 2013
to end the program with which it bought Treasury debt in an
effort to stimulate the economy.
A drop in Apple Inc shares of 2.6 percent to
$528.36 kept pressure on the Nasdaq.
Adding to concerns about Apple's ability to produce more
innovative products, rival Samsung Electronics Co Ltd
is expected to widen its lead over Apple in global
smartphone sales this year with growth of 35 percent. Market
researcher Strategy Analytics said Samsung had a broad product
Eli Lilly and Co was among the biggest boost's to
the S&P, up 3.7 percent to $51.56 after the pharmaceuticals
maker said it expects its 2013 earnings to increase to $3.75 to
$3.90 per share, excluding items, from $3.30 to $3.40 per share
Fellow drugmaker Johnson & Johnson rose 1.2 percent
to $71.55 after Deutsche Bank upgraded the Dow component to a
"Buy" from a "Hold" rating. The NYSEArca pharmaceutical index
climbed 0.6 percent.
Shares of Mosaic Co gained 3.3 percent to $58.62.
Excluding items, the fertilizer producer's quarterly earnings
beat analysts' expectations, according to Thomson Reuters
Volume was modest with about 6.07 billion shares traded on
the New York Stock Exchange, NYSE MKT and Nasdaq, slightly below
the 2012 daily average of 6.42 billion.
Advancing stocks outnumbered declining ones on the NYSE by
2,287 to 701, while on the Nasdaq, advancers beat decliners
1,599 to 866.