U.S. Stocks Lack Direction As Monthly Jobs Report Looms

With traders looking ahead to the release of the closely watched monthly jobs report on Friday, stocks have shown a lack of direction over the course of the trading day on Thursday.

The major averages have been bouncing back and forth across the unchanged line after climbing to record highs in the previous session.

Currently, the major averages are posting modest losses. The Dow is down 133.08 points or 0.3 percent at 44,880.96, the Nasdaq is down 11.23 points or 0.1 percent at 19,723.89 and the S&P 500 is down 8.03 points or 0.1 percent at 6,078.46.

The lackluster performance on Wall Street comes as traders seem reluctant to make significant moves ahead of the release of the Labor Department’s report on the employment situation in the month of November.

Economists currently expect employment to jump by 200,000 jobs in November after inching up by 12,000 jobs in October, while the unemployment rate is expected to tick up to 4.2 percent from 4.1 percent.

The jobs data could impact the outlook for interest rates ahead of the Federal Reserve’s next monetary policy meeting later this month.

While traders have recently expressed greater confidence the Fed will lower rates by another 25 basis points at the December meeting, there remains uncertainty about the likelihood of continued rate cuts at future meetings.

“Taken together, the October and November reports should show trend job growth continuing at a pace that allows the Fed to lower rates by 25bps at the December 18 FOMC meeting but we expect them to skip cutting rates in January,” said Nancy Vanden Houten, Lead U.S. Economist at Oxford Economics.

With the monthly jobs report looming, the Labor Department released a report this morning showing a modest increase by first-time claims for U.S. unemployment benefits in the week ended November 30th.

The report said initial jobless claims rose to 224,000, an increase of 9,000 from the previous week’s revised level of 215,000.

Economists had expected jobless claims to inch up to 215,000 from the 213,000 originally reported for the previous week.

Sector News

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

Airline stocks have shown a substantial move to the upside, however, with the NYSE Arca Airline Index surging by 2.4 percent.

Notable strength is also visible among banking stocks, as reflected by the 1.1 percent gain being posted by the KBW Bank Index.

On the other hand, gold stocks have moved lower along with the price of the precious metal, dragging the NYSE Arca Gold Bugs Index down by 1.3 percent.

Semiconductor stocks are also seeing considerable weakness on the day, resulting in a 1.3 percent drop by the Philadelphia Semiconductor Index.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in another mixed performance during trading on Thursday. While Japan’s Nikkei 225 Index rose by 0.3 percent, South Korea’s Kospi slid by 0.9 percent.

Meanwhile, European stocks have moved mostly higher on the day. The German DAX Index is up by 0.6 percent and the French CAC 40 Index is up by 0.2 percent, although the U.K.’s FTSE 100 Index is nearly unchanged.

In the bond market, treasuries are giving back ground after turning higher over the course of the previous session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 2.9 basis points at 4.211 percent.