* US jobs growth brakes in Aug, seen forcing Fed's hand
* Intel shares down after profit warning, weighs on semis
* Material shares rally on China infrastructure spending
* Stocks: Dow up 0.1 pct, S&P up 0.4 pct, Nasdaq flat
By Ryan Vlastelica
NEW YORK, Sept 7 (Reuters) - U.S. stocks held steady at
four-year highs o n F riday, closing out their best week since
June as a sharply disappointing jobs report only fueled
expectations that the Federal Reserve would act to stimulate the
economy next week.
The S&P closed higher but strength in both the Dow and
Nasdaq was limited by blue-chips Intel and Kraft, both of which
warned on their profit outlooks.
The August nonfarm payrolls report showed job growth of only
96,000, well under the 125,000 expected. That added to hopes the
Federal Reserve will announce additional stimulus after its
policy meeting ends Thursday, but investors could be in a
holding pattern until then.
"There's no way to sugarcoat how disappointing the jobs
number was, and as it reinforces the view the economy is
lagging, that puts more pressure on the Fed to act," said Joseph
Tanious, global market strategist at J.P. Morgan Funds in New
"I absolutely think stocks still have room to grow from
here, but there will certainly be disappointment if we don't get
direction from the Fed next week."
The expectations for central bank intervention, both from
the Fed and the European Central Bank, has fueled a rally that
took the S&P 500 to its highest level since January 2008 on
Thursday and pushed the Nasdaq to a 12-year high.
The gains were fueled by the ECB's decision to launch a
potentially unlimited bond-buying program to lower struggling
euro zone countries' borrowing costs.
"This was a very bold and unorthodox move by the ECB, and it
appears to be more important for stocks than the payroll report,
another example of how Europe is impacting the U.S. with a
vengeance," said Marco Priani, vice president at Advisory
Research in Chicago, which has about $10 billion in assets.
Energy and financial shares were among the day's strongest,
lifted as investors bought shares in areas tied to the pace of
economic growth. ConocoPhillips rose 1.5 percent to
$56.64 while Noble Energy rose 2.4 percent to $91.50.
Bank of America surged 5.4 percent to $8.80.
The Dow Jones industrial average ended up 14.64
points, or 0.11 percent, at 13,306.64. The Standard & Poor's 500
Index was up 5.80 points, or 0.40 percent, at 1,437.92.
The Nasdaq Composite Index was up 0.61 points, or 0.02
percent, at 3,136.42.
For the week, the S&P is up 2.2 percent while the Dow is up
1.6 percent and the Nasdaq is up 2.3 percent. It was the best
week for the S&P and Nasdaq since June, and the best for the Dow
Intel Corp cut its third-quarter revenue estimate
and withdrew its full-year forecast, saying demand for its chips
declined as customers reduced inventory and businesses bought
fewer personal computers. Shares of the world's largest
chipmaker fell 3.6 percent to $24.19 while the PHLX
semiconductor index lost 0.8 percent.
Kraft Foods Inc gave earnings forecasts for the two
companies it will split into next month that disappointed
analysts. The stock, which like Intel is a Dow component, fell
5.5 percent to $39.99.
The jobs report showed the unemployment rate dropped to 8.1
percent from 8.3 percent in July, but it was largely due to
Americans giving up the search for work.
Material shares were also among the strongest of the
day after China approved $157 billion in infrastructure spending
in a move to energize an economy that has recently shown signs
of slowing. AK Steel Holding surged 7.6 percent to $5.78
while James River Coal added 5.3 percent to $2.76 and
Alpha Natural Resources soared 17 percent to
Shares of Pandora Media Inc fell 17 percent to $10.47
following media reports that Apple Inc was in talks to
license music for a radio service like the one Pandora operates.
About 65 percent of companies traded on the New York Stock
Exchange closed higher while 56 percent of Nasdaq shares ended
Volume was light, with about 6.44 billion shares traded on
the New York Stock Exchange, the American Stock Exchange and
Nasdaq, below last year's daily average of 7.84 billion.