Stocks Close Mixed Ahead Of Monthly Jobs Report - U.S. Commentary

(RTTNews) - After showing a strong move to the upside in early trading on Thursday, stocks gave back ground over the course of the session. The major averages pulled back well off their best levels of the day before ending the session mixed.

While the Dow and the S&P 500 managed to end the day slightly higher, the Nasdaq fell 16.48 points or 0.4 percent to 4,733.50. The Dow edged up 23.88 points or 0.1 percent to 16,376.76, and the S&P 500 crept up 2.27 points or 0.1 percent to 1,951.13.

The lackluster close on Wall Street came as traders looked ahead to the release of the Labor Department's closely watched monthly jobs report on Friday.

Economists expect the report to show an increase of about 220,000 jobs in August following the addition of 215,000 jobs in July. The unemployment rate is expected to dip to 5.2 percent from 5.3 percent.

The monthly jobs data could have a significant impact on the outlook for whether the Federal Reserve will raise interest rates at its meeting later this month.

Earlier in the session, traders reacted positively to a slew of other U.S. economic data, including a report from the Commerce Department showing a notably narrower trade deficit in the month of July.

Reflecting an increase in exports and a decrease in imports, the report said the trade deficit narrowed to $41.9 billion in July from a revised $45.2 billion in June. The deficit was the smallest since February.

The Institute for Supply Management also released a report showing that the service sector continued to expand at a significant rate in August.

While the non-manufacturing index edged down to 59.0 in August from 60.3 in July, a reading above 50 indicates continued growth in the service sector. Economists had expected the index to dip to 58.5.

Meanwhile, the Labor Department released a report showing a bigger than expected increase in initial jobless claims in the week ended August 29th.

Traders also reacted positively to comments from European Central Bank President Mario Draghi, who said the ECB's quantitative easing program may run beyond September of 2016.

Sector News

Many of the major sectors ended the day showing only modest moves, contributing to the lackluster close by the broader markets.

Biotechnology stocks saw significant weakness, however, with the NYSE Arca Biotechnology Index tumbling by 1.9 percent. Celldex Therapeutics (CLDX) and Incyte (INCY) posted steep losses.

Notable weakness was also visible among gold stocks, as reflected by the 1.8 percent loss posted by the NYSE Arca Gold Bugs Index. The weakness in the sector came as gold for December delivery fell $9.10 to $1,124.50 an ounce.

On the other hand, oil service stocks showed a strong move to the upside, moving higher along with the price of crude oil. With crude for October delivery climbing $0.50 to $46.75 a barrel, the Philadelphia Oil Service Index rose by 1.2 percent.

Housing stocks also turned in a strong performance on the day, resulting in a 1.1 percent gain by the Philadelphia Housing Sector Index.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance on Thursday. Japan's Nikkei 225 Index rose by 0.5 percent, while Australia's All Ordinaries Index fell by 1.4 percent. The Chinese and Hong Kong markets were closed on the day.

Meanwhile, the major European markets all moved sharply higher on the day. While the German DAX Index soared by 2.7 percent, the French CAC 40 Index surged up by 2.2 percent and the U.K.'s FTSE 100 Index jumped by 1.8 percent.

In the bond market, treasuries experienced another choppy trading day before closing moderately higher. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 2.5 basis points to 2.168 percent.

Looking Ahead

The monthly jobs data is likely to be in focus early on Friday, although trading activity may wane over the course of the session going into the long weekend.