U.S. Stocks May See Modest Weakness As Jobs Data Looms

Following the lackluster performance seen in the previous session, stocks may move to the downside in early trading on Thursday. The major index futures are currently pointing to a modestly lower open for the markets, with the S&P 500 futures down by 0.2 percent.

Ongoing concerns about rising tensions in the Middle East may weigh on Wall Street, although trading activity is likely to remain subdued ahead of the release of the Labor Department’s closely watched monthly jobs report on Friday.

Economists currently expect the report to show employment rose by 140,000 jobs in September after climbing by 142,000 jobs in August, while the unemployment rate is expected to hold at 4.2 percent.

The data could impact the outlook for the U.S. economy as well as expectations regarding how aggressively the Federal Reserve will lower interest rates.

With the jobs data looming, CME Group’s FedWatch Tool is currently indicating a 63.0 percent chance the Fed will lower rates by a quarter point and a 37.0 percent chance of another half point rate cut.

A day ahead of the release of the more closely watched monthly jobs report, the Labor Department released a report this morning showing an uptick by first-time claims for U.S. unemployment benefits in the week ended September 28th.

The report said initial jobless claims rose to 225,000 last week, an increase of 6,000 from the previous week’s revised level of 219,000.

Economists had expected jobless claims to inch up to 220,000 from the 218,000 originally reported for the previous week.

The bigger than expected rebound came a week after jobless claims fell to their lowest level since hitting 216,000 in the week ended May 18th.

Shortly after the start of trading, the Institute for Supply Management is scheduled to release its report on service sector activity in the month of September.

The ISM’s services PMI is expected to inch up to 51.7 in September after rising to 51.5 in August, with a reading above 50 indicating growth.

The Commerce Department is also due to release its report on new orders for manufactured goods in the month of August. Factory orders are expected to rise by 0.2 percent.

After recovering from an early move to the downside, stocks showed a lack of direction over the course of the trading session on Wednesday. The major averages spent the day bouncing back and forth across the unchanged line before eventually closing slightly higher.

The Dow edged up 39.55 points or 0.1 percent to 42,196.52, the Nasdaq inched up 14.76 points or 0.1 percent to 17,925.12 and the S&P 500 crept up 0.79 points or less than a tenth of a percent to 5,709.54.

In overseas trading, stock markets across the Asia-Pacific region turned in another mixed performance during trading on Thursday. Japan’s Nikkei 225 Index surged by 2.0 percent, while Hong Kong’s Hang Seng Index slumped by 1.5 percent.

Meanwhile, European stocks have moved mostly lower on the day. The French CAC 40 Index is down by 0.9 percent and the German DAX Index is down by 0.6 percent, although the U.K.’s FTSE 100 Index has bucked the downtrend and crept up by 0.1 percent.

In commodities trading, crude oil futures are jumping $1.34 to $71.44 a barrel after rising $0.27 to $70.10 a barrel on Wednesday. Meanwhile, after tumbling $20.60 to $2,669.70 an ounce in the previous session, gold futures are inching up $1.30 to $2,671 an ounce.

On the currency front, the U.S. dollar is trading at 146.72 yen versus the 146.47 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.1030 compared to yesterday’s $1.1045.