Investors braced for the much-anticipated August jobs report
U.S. stocks finished mostly higher on Thursday, 01 September 2016 recovering from earlier losses, as investors braced for the much-anticipated August jobs report on Friday, which could set the stage for a near-term interest-rate increase by the Federal Reserve. The stock market ended the Thursday affair on a flat note as the S&P 500 clawed back the bulk of today's loss. Trading conditions continued to be on the lighter side as market participants wind down recent vacation schedules and look ahead to tomorrow's Employment Situation Report for August.Equity indices sputtered at the start of the session as a string of weaker-than-expected economic data weighed on the broader market.
The Dow Jones Industrial Average ended 18.42 points, or 0.1%, higher at 18,419.30. The Nasdaq Composite Index ended with a gain of 13.99 points, or 0.3%, at 5,227.21, benefiting from some buying in tech shares. The S&P 500 index lost 0.09 points, or less than 0.1%, to close at 2,170.86, but well off the session low.
A 2% rise by Wal-Mart Stores and a 1.8% rise by Nike led blue-chip gainers. American Express and Goldman Sachs were the biggest laggards in the gauge.
Dow component Wal-Mart's shares rose after The Wall Street Journal reported that the retail giant planned to eliminate 7,000 jobs.
Among economic data expected for the day, stocks took a sharp step lower after a key data point; The Institute for Supply Management manufacturing index in August fell to 49.4% from 52.6% last month. A reading below 50% signals contraction.
A similar but less influential gauge, the Markit manufacturing purchasing managers index, fell to 52 from 52.9% in July.
Crude oil futures closed down more than 3% on Thursday, 01 September 2016 carving out another three-week low, as doubts over the potential for a crude-production freeze persisted and data showing a contraction in the U.S. manufacturing activity contributed to expectations of weaker energy demand. Prices for natural gas, meanwhile, dropped over 3% after an increase in weekly U.S. supplies of the commodity came in a bit higher than expected.
October West Texas Intermediate crude fell by $1.54, or 3.5%, to settle at $43.16 a barrel on the New York Mercantile Exchange, with prices down a fourth-straight session. November Brent crude on London's ICE Futures exchange ended at $45.45 a barrel, down $1.44, or 3.1%.
Gold futures rebounded from two-month lows on Thursday, 01 September 2016 to finish higher, after data showing a fall in U.S. manufacturing activity pressured the dollar and potentially gave the Federal Reserve a little less reason to boost interest rates at a meeting this month. Traders will now look ahead to Friday's monthly U.S. jobs report for further clues on the central bank's plans for interest rates.
December gold rose $5.70, or 0.4%, to settle at $1,317.10 an ounce. December silver rose 23.6 cents, or 1.3%, to $18.943 an ounce. For the month of August, however, silver prices declined 8.1%, based on the most-active contract.
Gold fell as the dollar moved lower against its chief rivals. The ICE U.S. Dollar Index, a measure of the greenback against a basket of six rival currencies, was down 0.3% as gold futures settled.
Fed Chairwoman Janet Yellen had reiterated at the Jackson Hole, Wyo. economic summit last week that any decision on rates would be depended on the degree to which incoming data continues to confirm the Fed policy committee's outlook.
The market will get further clues on that front from data set for release Friday. The Labor Department is expected to say the world's largest economy added 185,000 jobs in August; its report includes government hiring.
Treasuries ended on a mixed note with the short end of the curve demonstrating relative strength. The yield on the 2-yr note ended lower by three basis points (0.78%) while the yield on the 30-yr bond settled flat at 2.23%. For its part, the yield on the benchmark 10-yr note slipped one basis point to 1.57%
Today's participation was below the recent average as fewer than 805 million shares changed hands on the NYSE floor.
Tomorrow's economic data will include the Employment Situation Report for August (consensus 180k) and the Trade Balance for July (consensus -$43.0 billion), which will each cross the wires at 8:30 ET. Separately, Factory Orders for July (consensus +2.0%) will be released at 10:00 ET.
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