Stocks Close Little Changed As Monthly Jobs Report Looms - U.S. Commentary

(RTTNews) - After ending the previous session sharply lower, stocks saw considerable volatility over the course of the trading day on Thursday. The markets managed to recover from a sell-off in morning trading, but the major averages ended the day mixed.

While the Dow climbed well off its worst levels, the blue chip index still edged down 3.66 points or less than a tenth of a percent to 16,801.05.

The tech-heavy Nasdaq climbed 8.11 points or 0.2 percent to 4,430.19, while the S&P 500 closed nearly flat, up just 0.01 points at 1,946.17.

The lackluster close on Wall Street was partly due to uncertainty ahead of the Labor Department's closely watched monthly jobs report on Friday.

Economists expect the report to show an increase of about 215,000 jobs, while the unemployment rate is expected to come in unchanged at 6.1 percent.

While strong job growth would be a positive sign for the economy, it could also add to recent concerns about the outlook for interest rates.

Generating some optimism about the report, the Labor Department released a separate report this morning showing an unexpected drop in initial jobless claims in the week ended September 27th.

The report said initial jobless claims fell to 287,000 from the previous week's revised level of 295,000, while economists had expected jobless claims to edge up to 297,000.

Meanwhile, traders were also digesting remarks by European Central Bank President Mario Draghi, who provided some details regarding the bank's bond purchase plans.

Draghi revealed that the ECB will start buying covered bonds in mid-October and asset-backed securities at some point in the fourth quarter.

"As expected, the ECB fleshed out details of its Asset Backed Securities and covered bond buying programs, but it did little to suggest that there are any further policy initiatives imminent," said Howard Archer, Chief U.K. and European Economist at IHS Global Insight.

He added, "In particular, the ECB does not appear poised to pull the QE trigger in the immediate future at least, which likely at least partly reflects intense German opposition to such a move."

Sector News

Many of the major sectors ended the day showing only modest moves, contributing to the lackluster close by the broader markets.

Trucking stocks showed a strong move to the upside, however, with the Dow Jones Trucking Index jumping by 1.4 percent. The gain by the index came after it ended the previous session at its worst closing level in almost two months.

Knight Transportation (KNX) helped to lead the trucking sector higher, surging up by 3 percent to a new record closing high.

Significant strength was also visible among airline stocks, as reflected by the 1.1 percent gain posted by the NYSE Arca Airline Index. The index bounced well off yesterday's five-month closing low.

Gold, brokerage, and retail stocks also saw strength on the day, while energy and defense stocks moved to the downside.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region came under pressure on Thursday. Japan's Nikkei 225 Index dove by 2.6 percent, while Australia's All Ordinaries Index slumped by 0.7 percent. The Hong Kong and Chinese markets remained closed for holidays.

The major European markets also showed notable moves to the downside on the day. While the French CAC 40 Index plummeted by 2.8 percent, the German DAX Index tumbled by 2 percent and the U.K.'s FTSE 100 Index plunged by 1.7 percent.

In the bond market, treasuries showed a lack of direction throughout the session before closing moderately lower. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 3.5 basis points to 2.438 percent.

Looking Ahead

While the monthly jobs report is likely to be in spotlight on Friday, traders will also be presented with U.S. reports on international trade and service sector activity.