Stocks Close Roughly Flat After Recovering From Early Weakness - U.S. Commentary

(RTTNews) - After coming under pressure in morning trading on Thursday, stocks showed a significant recovery over the course of the trading session. The major averages climbed well off their lows for the session before ending the day mixed.

While the Nasdaq and the S&P 500 managed to climb into positive territory, the Dow edged down 12.69 points or 0.1 percent to 16,272.01. The Nasdaq crept up 6.92 points or 0.2 percent to 4,627.08 and the S&P 500 rose 3.79 points or 0.2 percent to 1,923.82.

The mixed close on Wall Street came as traders expressed uncertainty ahead of the release of tomorrow's closely watched monthly jobs report.

The Labor Department report is expected to show an increase of about 203,000 jobs in September following the addition of 173,000 jobs in August.

The jobs data could have a significant impact on expectations regarding whether the Federal Reserve will raise interest rates later this month.

Before the start of trading, the Labor Department released a report showing that initial jobless claims rose by more than expected in the week ended September 26th.

The report said initial jobless claims climbed to 277,000, an increase of 10,000 from the previous week's unrevised level of 267,000. Economists had expected jobless claims to edge up to 271,000.

The Institute for Supply Management also released a separate report showing that its reading on activity in the manufacturing sector fell to a two-year low in September.

The ISM said its purchasing managers index dropped to 50.2 in September from 51.1 in August, although a reading above 50 indicates growth in the sector. Economists had expected the index to dip to 50.5.

With the bigger than expected decrease, the manufacturing index fell to its lowest level since hitting 50.1 in May of 2013.

Meanwhile, the Commerce Department released a report showing that construction spending rose slightly more than expected in August amid a jump in spending on residential construction.

Sector News

Many of the major sectors ended the day showing only modest moves, although substantial weakness remained visible among electronic storage stocks. The NYSE Arca Disk Drive Index tumbled by 2.3 percent after surging up by 3.5 percent on Wednesday.

Imation (IMN), Datalink (DTLK), and Seagate Technology (STX) turned in some of the storage sector's worst performances.

Gold stocks also came under pressure on the day, dragging the NYSE Arca Gold Bugs Index down by 2.3 percent. The weakness in the sector came as gold for December delivery dipped $1.50 to $1,113.70 an ounce.

Oil service, utilities, and semiconductor stocks also finished the session notable lower, while significant strength was visible among railroad and housing stocks.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Thursday. Japan's Nikkei 225 Index surged up by 1.9 percent, while Australia's All Ordinaries Index jumped by 1.7 percent. However, the Chinese and Hong Kong Markets were closed.

Meanwhile, the major European markets turned in a mixed performance on the day. While the U.K.'s FTSE 100 Index edged up by 0.2 percent, the French CAC 40 Index fell by 0.7 percent and the German DAX Index tumbled by 1.6 percent.

In the bond market, treasuries closed modestly higher but well off their best levels of the session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by 1.8 basis points to 2.042 percent.

Looking Ahead

The monthly jobs report is likely to be in the spotlight on Friday, although traders are also likely to keep an eye on remarks by a number of Fed officials.