Stocks Close Slightly Higher Ahead Of Monthly Jobs Data - U.S. Commentary

(RTTNews) - With the monthly jobs report looming, stocks showed a lack of direction throughout the trading session on Thursday. The major averages spent the day bouncing back and forth across the unchanged line.

The major averages eventually closed slightly higher. The Dow inched up 2.46 points or less than 0.1 percent to 20,858.19, the Nasdaq crept up 1.25 points or less than 0.1 percent to 5,838.81 and the S&P 500 edged up 1.89 points or 0.1 percent to 2,364.87.

The choppy trading on Wall Street came as traders seemed reluctant to make significant moves ahead of the release of the Labor Department's closely watched jobs report on Friday.

The report is expected to show that employment increased by about 195,000 jobs in February after jumping by 227,000 jobs in January. The unemployment rate is expected to dip to 4.7 percent from 4.8 percent.

A report showing continued job growth in the month of February is likely to further reinforce expectations that the Federal Reserve will raise interest rates at its monetary policy meeting next week.

Ahead of the monthly jobs report, the Labor Department released a report this morning showing a rebound in initial jobless claims in the week ended March 4th.

The report said initial jobless claims climbed to 243,000, an increase of 20,000 from the previous week's unrevised level of 223,000. Economists had expected jobless claims to rise to 235,000.

The bigger than expected increase came after jobless claims fell to their lowest level since March of 1973 in the previous week.

The Labor Department also released a report showing that import and export prices both rose by slightly more than anticipated in the month of February.

Traders were also digesting the European Central Bank's widely expected decision to leave interest rates unchanged and maintain its asset purchase program.

The ECB said it stands ready to increase the size or duration of its asset purchase program if the economic outlook becomes less favorable.

In his subsequent press conference, ECB President Mario Draghi said risks surrounding the euro area growth outlook have become less pronounced but remain tilted to the downside.

Sector News

Most of the major sectors showed only modest moves on the day, contributing to the lackluster performance by the broader markets.

Commercial real estate stocks saw significant weakness, however, with the Morgan Stanley REIT Index slumping by 1.5 percent. The drop extended a recent downward trend by the index, which fell to a nearly three-month closing low.

The recent weakness among commercial real estate stocks reflects concerns about the impact of higher interest rates on the industry.

Notable weakness was also visible among gold stocks, as reflected by the 1.3 percent loss posted by the NYSE Arca Gold Bugs Index. The index fell to its lowest closing level in over two months.

The decline by gold stocks came amid a decrease by the price of the precious metal, as gold for April delivery slid $6.20 to $1,203.20 an ounce.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower on Thursday. Hong Kong's Hang Seng Index tumbled by 1.2 percent, while Australia's All Ordinaries Index fell by 0.3 percent. However, Japan's Nikkei 225 Index bucked the downtrend and rose by 0.3 percent.

Meanwhile, the major European markets turned in a mixed performance on the day. While the U.K.'s FTSE 100 Index dipped by 0.3 percent, the German DAX Index inched up by 0.1 percent and the French CAC 40 Index rose by 0.4 percent.

In the bond market, treasuries extended the downward trend seen over the past several sessions. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, climbed by 4.6 basis points to 2.598 percent.

Looking Ahead

Trading on Friday is likely to be driven by reaction to the Labor Department's closely watched monthly employment report for February.