Stocks came under pressure early in the session on Thursday but staged a notable recovery attempt over the course of the trading day. The major averages peeked above the unchanged line late in the session but closed modestly lower.
After falling by nearly 190 points in early trading, the Dow ended the day down just 9.98 points or less than a tenth of a percent at 33,119.57. The Nasdaq edged down 16.18 points or 0.1 percent to13,219.83, while the S&P 500 slipped 5.56 points or 0.1 percent to 4,258.19.
The early weakness on Wall Street came as traders remain worried about the outlook for interest rates ahead of the release of closely watched employment data on Friday.
The Labor Department is expected to show employment increased by 170,000 jobs in September after climbing by 187,000 jobs in August, while the unemployment rate is expected to edge down to 3.7 percent from 3.8 percent.
“We think the September employment report would be too hot for Fed officials to conclude that they have delivered enough tightening, keeping the prospect of an additional rate hike later this year alive,” said Michael Pearce, Lead US Economist at Oxford Economics.
He continued, “We still expect officials to remain on the sidelines, but that is conditional on our forecast of a sharper downturn in the economy and labor market over the closing months of the year.”
Selling pressure waned over the course of the session, however, with a continue pullback by treasuries inspiring some traders to pick up stocks at reduced levels.
Ahead of the monthly jobs report, the Labor Department released a report showing a slight uptick in first-time claims for U.S. unemployment benefits in the week ended September 30th.
The report said initial jobless claims crept up to 207,000, an increase of 2,000 from the previous week’s revised level of 205,000.
Economists had expected jobless claims to rise to 210,000 from the 204,000 originally reported for the previous week.
Sector News
Biotechnology stocks showed a strong move to the upside over the course of the session, driving the NYSE Arca Biotechnology Index up by 1.5 percent. The index continued to regain ground after ending Tuesday’s session at an eleven-month closing low.
Significant strength also emerged among brokerage stocks, as reflected by the 1.2 percent gain posted by the NYSE Securities Arca Broker/Dealer Index.
Gold and natural gas stocks also saw notable strength on the day on the day, with the NYSE Arca Gold Bugs Index and the NYSE Arca Natural Gas Index climbing by 1.2 percent and 1.1 percent, respectively.
Meanwhile, networking stocks continued to see substantial weakness, dragging the NYSE Arca Networking Index down by 3.0 percent to its lowest closing level in over a year.
Other Markets
In overseas trading, most stock markets across the Asia-Pacific region ground on Thursday following recent weakness. Japan’s Nikkei 225 Index surged by 1.8 percent, while Australia’s S&P/ASX 200 Index climbed by 0.5 percent.
Meanwhile, the major European markets turned in a mixed performance on the day. While the German DAX Index dipped by 0.2 percent, the French CAC 40 Index closed just above the unchanged line and the U.K.’s FTSE 100 Index rose by 0.5 percent.
In the bond market, treasuries moved modestly higher over the course of the session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by 1.8 basis points to 4.717 percent.
Looking Ahead
Trading on Friday is likely to be driven by reaction to the monthly jobs report and its impact on the outlook for interest rates.
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