Wall Street dips as investors grow cautious before jobs data

Drop in biotech and momentum shares drag the Nasdaq down nearly 1%

US stocks slipped on Thursday, as investors turned cautious ahead of Friday's monthly jobs report, while a drop in biotech and momentum shares dragged the Nasdaq down nearly 1%.

The Dow ended down just a fraction of a point, within about 4 points of its record closing high of 16,576.66 set on December 31. The Dow posted an all-time intraday high during the session.

Market outperformers in the Internet and biotech sectors lost ground, resuming a selloff from March after some recent gains. Two weeks ago, biotechs suffered their worst day since 2011.

"That's a buying opportunity in our view. We think (biotech) will come roaring back. It's not just going to have one good year and be done," said Randy Warren, chief investment officer of Warren Financial Service in Exton, Pennsylvania.

 

The Nasdaq biotechnology index slid 2.7%.

Among momentum stocks, the shares of Tesla Motors , the electric car maker, fell 2.1% to $225.40 and the shares of Netflix Inc , the online movie rental company, lost 2.3% to close at $354.69. Facebook shares fell 5.2% to end at $59.49.

Investors were reluctant to make big bets ahead of Friday's nonfarm payrolls report, when they will be looking for evidence that recent weather-related weakness in the economy has passed. Economists expect that employers added 200,000 jobs to nonfarm payrolls in March, according to a Reuters poll.

The Dow Jones industrial average dipped 0.45 of a point to close at 16,572.55, after hitting an intraday record of 16,604.15.

The S&P 500 slipped 2.13 points or 0.11%, to finish at 1,888.77. It also hit an intraday record high of 1,893.80. The Nasdaq Composite dropped 38.716 points or 0.91%, to end at 4,237.74.

The Global X Social Media ETF , which includes Facebook, LinkedIn Corp and Groupon Inc , fell 3.4%.

Some analysts said the selloff in "momentum" stocks has yet to run its course

The options market also focused on momentum stocks, with Tesla Motors remaining a favorite with the speculative crowd for a second day. The total option volume by afternoon was running at about a 30% mark-up to what's typically seen.

Anadarko Petroleum Corp shares jumped 14.5% to close at $99.02 following news that the company will pay $5.15 billion to settle years of litigation over pollution clean-up claims related to uranium deposits, wood creosote and rocket fuel processing. The agreement marked the biggest environmental bankruptcy settlement on record.

Shares of Barnes & Noble Inc plunged 13.5% to $19.12 after Liberty Media Corp said it has sold almost all of its stake in the company, ending a nearly three-year bet that the struggling retailer would emerge as a dominant seller of e-books.

The S&P 500 now consists of 501 stocks, with the index including both Google Inc's Class A and Class C shares after the company's special dividend. Google's Class A shares rose 0.6% to $571.50 while its Class C shares gained 0.5% to $569.74.

On the economic front, the US trade deficit unexpectedly widened in February to $42.3 billion as exports hit a five-month low, suggesting that first-quarter growth could be much weaker than initially expected.

A bright spot came from the services sector, where growth accelerated in March after being hampered by unusually cold weather, according to the Institute for Supply Management's services-sector index.

In the biopharmaceutical sector, Gilead Sciences Inc said late Wednesday that a trial of its hepatitis C drug sofosbuvir, sold under the brand name Sovaldi in the United States, showed the drug was safe and effective in treating Japanese patients infected with a common form of the virus. Its stock edged up 0.1% to close at $74.

About 6.0 billion shares changed hands on US exchanges, below the 6.4 billion average so far this month, according to data from BATS Global Markets.

Decliners beat advancers on the New York Stock Exchange by 1,772 to 1,220 and on the Nasdaq by 1,837 to 775.