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

(RTTNews) - After turning mostly lower early in the session, stocks fluctuated over the course of the trading day on Thursday. The major averages bounced back and forth across the unchanged line before eventually ending the session little changed.

The S&P 500 ended the day just below the unchanged line, edging down by 0.09 points to 2.170.86, while the Dow crept up by 18.42 points or 0.1 percent to 18,419.30 and the Nasdaq rose by 13.99 points or 0.3 percent to 5,227.21.

The choppy trading seen as the day progressed came as traders continued to look ahead to the Labor Department's monthly jobs report due Friday morning.

The report is expected to show an increase of about 175,000 jobs in August following the jump of 255,000 jobs in July. The unemployment rate is expected to edge down to 4.8 percent from 4.9 percent.

The jobs data is likely to have a significant impact on expectations regarding whether the Federal Reserve will raise interest rates at its next meeting later this month.

Early in the day, some negative sentiment was generated by a report from the Institute for Supply Management showing an unexpected contraction in U.S. manufacturing activity in the month of August.

The ISM said its purchasing managers index slumped to 49.4 in August from 52.6 in July, with the reading below 50 indicating the first contraction in manufacturing activity since February.

Economists had expected the index to show a much more modest decrease to a reading of 52.2, which would have still indicated growth in the sector.

A separate report from the Labor Department showed a modest uptick in first-time claims for U.S. unemployment benefits in the week ended August 27th.

The report said initial jobless claims edged up to 263,000, an increase of 2,000 from the previous week's unrevised level of 261,000. Economists had expected jobless claims to rise to 265,000.

Sector News

Many of the major sectors ended the day showing only modest moves, although substantial strength was visible among gold stocks. After ending Wednesday's trading at its lowest closing level in over two months, the NYSE Arca Gold Bugs Index surged up by 4.3 percent

The rally by gold stocks came as the price of gold for December delivery climbed $5.70 to $1,317.10 after ending the previous session at a two-month closing low.

Trucking stocks also showed a strong move to the upside on the day, driving the Dow Jones Trucking Index up by 1.4 percent. With the gain, the index reached its best closing level in over a month.

On the other hand, oil service stocks saw notable weakness amid a steep drop by the price of crude oil. The Philadelphia Oil Service Index slumped by 1.2 percent to a nearly five-month closing low.

The weakness among oil service stocks came as crude oil for October delivery tumbled $1.54 to $43.16 a barrel amid continued concerns about a supply glut.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region extended a recent trend and turned in another mixed performance on Thursday. Japan's Nikkei 225 Index crept up by 0.2 percent, while China's Shanghai Composite Index slid by 0.7 percent.

Meanwhile, European stocks moved mostly lower on the day. While the French CAC 40 Index closed just above the unchanged line, the U.K.'s FTSE 100 Index and the German DAX Index fell by 0.5 percent and 0.6 percent, respectively.

In the bond market, treasuries recovered from early weakness to close nearly flat for the third straight day. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, inched up by less than a basis point to 1.570 percent.

Looking Ahead

The monthly jobs report is likely to be in focus on Friday, overshadowing separate reports on international trade and factory orders.