U.S. Stocks Moving Back To The Downside As Jobs Data Looms

Stocks have moved mostly lower over the course of morning trading on Thursday, giving back ground following the rebound seen in the previous session. The major averages have all moved to the downside, with the tech-heavy Nasdaq leading the pullback.

Currently, the major averages are just off their lows of the session. The Nasdaq is down 137.75 points or 1.0 percent at 13,098.26, the S&P 500 is down 31.20 points or 0.7 percent at 4,232.55 and the Dow is down 124.82 points or 0.4 percent at 33,004.73.

The pullback on Wall Street comes 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.”

Ahead of the monthly jobs report, the Labor Department released a report this morning 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

Networking stocks are extending a recent sell-off, with the NYSE Arca Networking Index plunging by 2.9 percent to its lowest intraday level in over a year.

Considerable weakness has also emerged among airline stocks, as reflected by the 1.5 percent drop by the NYSE Arca Airline Index. The index is giving back ground after soaring by 2.7 percent on Wednesday.

Retail, software and semiconductor stocks are also seeing notable weakness, while natural gas stocks are regaining ground after falling sharply over the past few sessions.

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 are turning in a mixed performance on the day. While the German DAX Index is down by 0.2 percent, the French CAC 40 Index is nearly unchanged and the U.K.’s FTSE 100 Index is up by 0.6 percent.

In the bond market, treasuries have shown a lack of direction over the course of the morning. Currently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by less than a basis point at 4.729 percent.