Choppy Trading Results In Mixed Close On Wall Street - U.S. Commentary

(RTTNews) - After moving notably higher over the two previous sessions, stocks showed a lack of direction throughout much of the trading session on Thursday. The major averages spent the day bouncing back and forth across the unchanged line.

The major averages eventually ended the session mixed. While the Nasdaq inched up 0.55 points or less than a tenth of a percent to 4,869.85, the Dow edged down 31.57 points or 0.2 percent to 17,685.09 and the S&P 500 dipped 4.21 points or 0.2 percent to 2,059.74.

For the first quarter of 2016, the Dow jumped by 1.5 percent and the S&P 500 advanced by 0.8 percent, while the Nasdaq slumped by 2.7 percent.

The choppy trading on Wall Street came as traders seemed reluctant to make significant moves ahead of the release of the Labor Department's closely watched monthly jobs report on Friday.

The report is expected to show an increase of about 210,000 jobs in March after employment jumped by 242,000 jobs in February. The unemployment rate is expected to hold at 4.9 percent.

Jay Morelock, an economist at FTN Financial, said, "After Chair Yellen dampened expectations of a Fed move in April, all eyes turn to Friday's employment report to gauge whether the Fed will lean toward June or push the next rate hike into the second half of the year."

Traders also expressed some uncertainty about the near-term outlook for the markets after recent gains lifted the major averages to their best levels in about three months.

In addition to tomorrow's monthly employment report, the earnings reporting season is also looming on the horizon.

On the U.S. economic front, the Labor Department released a report before the start of trading showing a modest increase in initial jobless claims in the week ended March 26th.

The report said initial jobless claims climbed to 276,000, an increase of 11,000 from the previous week's unrevised level of 265,000. Economists had expected jobless claims to inch up to 266,000.

A separate report from MNI Indicators showed a stronger than expected rebound by Chicago-area business activity in the month of March.

Sector News

Most of the major sectors ended the day showing only modest moves, contributing to the lackluster close by the broader markets. Biotechnology stocks showed a substantial move to the upside, however, with the NYSE Arca Biotechnology Index jumping by 3.2 percent.

Medivation (MDVN) led the biotech sector higher after Reuters reported the cancer drug maker has been working with JPMorgan (JPM) to handle potential takeover offers.

Significant strength was also visible among electronic storage stocks, as reflected by the 2.1 percent gain posted by the NYSE Arca Disk Drive Index. Nimble Storage (NMBL) and Datalink (DTLK) posted standout gains.

Natural gas stocks also turned in a strong performance, resulting in a 1.7 percent gain by the NYSE Arca Natural Gas Index. The strength in the sector came despite a decrease by the price of natural gas.

On the other hand, railroad stocks came under pressure on the day, giving back ground after moving notably higher over the two previous sessions. Reflecting the weakness in the sector, the Dow Jones Railroads Index fell by 1.5 percent.

Chemical stocks also showed a notable move to the downside, dragging the Dow Jones Chemicals Index down by 1.2 percent. The loss by the index came after it ended the previous session at its highest closing level in three months.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Thursday. Japan's Nikkei 225 Index slid by 0.7 percent, while Australia's All Ordinaries Index jumped by 1.4 percent.

Meanwhile, the major European markets all moved to the downside on the day. While the French CAC 40 Index slumped by 1.3 percent, the German DAX Index dropped by 0.8 percent and the U.K.'s FTSE 100 Index fell by 0.5 percent.

In the bond market, treasuries climbed firmly into positive territory, more than offsetting the pullback seen in the previous session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, dropped 4.4 basis points to 1.786 percent.

Looking Ahead

The monthly jobs report is likely to be in the spotlight on Friday, overshadowing another batch of data on manufacturing activity, consumer sentiment, and construction spending.