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

(RTTNews) - With traders reluctant to make any significant moves ahead of tomorrow's monthly jobs report, stocks fluctuated throughout the trading day on Thursday before ending the session mixed. A mixed batch of economic data also contributed to the choppy trading.

The major averages ended the day on opposite sides of the unchanged line. While the Nasdaq rose 12.90 points or 0.3 percent to 4,127.45, the Dow dipped 21.97 points or 0.1 percent to 16,558.87 and the S&P 500 edged down 0.27 points or less than a tenth of a percent to 1,883.68.

The lackluster performance on Wall Street came as traders stayed on the sidelines ahead of the release of the Labor Department's monthly jobs report before the start of trading on Friday.

Economists expect the report to show an increase of about 215,000 jobs in April following the addition of 192,000 jobs in March. The unemployment rate is also expected to edge down to 6.6 percent from 6.7 percent.

Traders were also digesting a mixed batch of economic data, including encouraging reports on personal spending and manufacturing activity and disappointing readings on weekly jobless claims and construction spending.

Before the start of trading, the Commerce Department released a report showing that personal spending surged up by 0.9 percent in March following an upwardly revised 0.5 percent increase in February. Spending had been expected to increase by about 0.6 percent.

The jump in spending, the biggest monthly increase since August of 2009, came amid a bigger than expected increase in personal income.

Additionally, the Institute for Supply Management released a report showing that its index of U.S. manufacturing activity rose by more than expected in the month of April.

The ISM said its purchasing managers index climbed to 54.9 in April from 53.7 in March, with a reading above 50 indicating growth in the manufacturing sector. Economists had expected the index to edge up to a reading of 54.3.

Meanwhile, the Labor Department released a separate report showing an unexpected increase in initial jobless claims in the week ended April 26th.

The report said initial jobless claims climbed to 344,000, an increase of 14,000 from the previous week's revised level of 330,000. The increase came as a surprise to economists, who had expected jobless claims to dip to 320,000.

The Commerce Department also released a report showing that construction spending rose by less than expected in the month of March.

Sector News

While many of the major sectors ended the day showing only modest moves, considerable weakness was visible among gold stocks. Reflecting the weakness in the gold sector, the NYSE Arca Gold Bugs Index fell by 1.5 percent.

The weakness among gold stocks came amid a notable decrease by the price of the precious metal, with gold for June delivery sliding $12.50 to $1,283.40 an ounce.

Electronic storage stocks also came under pressure, dragging the NYSE Arca Disk Drive Index down by 1.4 percent to a four-month closing low. Western Digital (WDC) helped to lead the sector lower after reporting better than expected third quarter earnings but providing disappointing guidance.

Meanwhile, airline stocks showed a strong move to the upside on the day, resulting in a 1.8 percent advance by the NYSE Arca Airline Index. Republic Airways (RJET) posted a substantial gain after reporting strong first quarter earnings growth.

Internet stocks also saw significant strength on the day, contributing to the upward move by the tech-heavy Nasdaq. The Dow Jones Internet Composite Index rose by 1.4 percent, climbing further off the six-month closing low that it set on Monday.

Other Markets

Overseas, most of the major markets were closed for May Day holidays. However, Japan's Nikkei 225 Index jumped by 1.3 percent on the day, while the U.K.'s FTSE 100 Index rose by 0.4 percent.

In the bond market, treasuries moved notably higher, extending the upward move seen in the previous session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 4.2 basis points to a nearly three-month closing low of 2.606 percent.

Looking Ahead

Trading on Friday is likely to be driven by reaction to the monthly jobs report, although the Commerce Department is also scheduled to release its monthly report on factory orders.

Additionally, Chevron (CVX), CVS Caremark (CVS), and Newell Rubbermaid (NWL) are among the companies due to report their quarterly results before the start of trading on Friday.