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

(RTTNews) - After moving moderately higher in morning trading on Thursday, stocks turned mixed over the course of the afternoon. Trepidation ahead of tomorrow's monthly jobs report likely contributed to the lackluster close by the markets.

While the Dow and the S&P 500 managed to hold on to modest gains, the tech-heavy Nasdaq slid into negative territory and closed down 5.85 points or 0.1 percent at 4,352.13. The Dow rose 61.71 points or 0.4 percent to 16,421.89, and the S&P 500 edged up 3.22 points or 0.2 percent to 1,877.03.

The strength seen early in the session came following the release of a report from the Labor Department showing that initial jobless claims fell by more than expected in the week ended March 1st.

The report said initial jobless claims dropped to 323,000, a decrease of 26,000 from the previous week's revised figure of 349,000. Economists had expected jobless claims to dip to 338,000.

With the bigger than expected decrease, jobless claims fell to their lowest level since hitting 305,000 in the last week of November.

The data represents an upbeat sign for the labor market ahead of tomorrow's closely watched monthly jobs report.

Nonetheless, traders seemed somewhat reluctant to make significant moves ahead of the jobs report, limiting the upside for the markets.

Economists expect the report to show that employment increased by about 150,000 jobs in February following the addition of 113,000 jobs in January. The unemployment rate is expected to remain unchanged at 6.6 percent.

Separate reports showing slower than previously estimated fourth quarter productivity growth and a bigger than expected drop in January factory orders also helped to keep buying interest in check.

Among individual stocks, shares of Logitech (LOGI) showed a strong upward move after the computer accessories maker raised its guidance for fiscal 2015 and announced a $250 million share buyback program.

Fast food giant Yum! Brands (YUM) also moved notably higher after Robert W. Baird raised its rating on the company's stock to Outperform from Neutral.

On the other hand, shares of Staple (SPLS) moved sharply lower on the day after the office supplies retailer reported weaker than expected fourth quarter results and provided disappointing guidance. The company also announced plans to close up to 225 stores.

Sector New

Trucking stocks showed a strong move to the upside over the course of the session, driving the Dow Jones Trucking Index up by 1.7 percent. With the gain, the index ended the session at its best closing level in a month.

Landstar (LSTR) helped to lead the trucking sector higher, advancing by 3.1 percent after holding its mid-quarter conference call.

Significant strength was also visible among airline stocks, as reflected by the 1.5 percent gain posted by the NYSE Arca Airline Index. The gain extended a recent upward trend by the index, which reached a nearly twelve-year closing high.

Gold, oil service, and steel stocks also moved notably higher on the day, potentially reflecting optimism about the outlook for demand.

On the other hand, biotechnology stocks came under considerable selling pressure, dragging the NYSE Arca Biotechnology Index down by 2.4 percent. ImmunoGen (IMGN), Exact Sciences (EXAS), and Nektar Therapeutics (NKTR) posted steep losses.

Electronic storage and tobacco stocks also moved to the downside, partly offsetting the strength seen in the aforementioned sectors.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Thursday. Japan's Nikkei 225 Index surged up by 1.6 percent, while Hong Kong's Hang Seng Index advanced by 0.6 percent.

The major European markets also moved to the upside on the day. While the French CAC 40 Index rose by 0.6 percent, the U.K.'s FTSE 100 Index edged up by 0.2 percent and the German DAX Index closed just above the unchanged line.

In the bond market, treasuries came under pressure on the upbeat jobs data, pulling back further off their recent highs. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 3.9 basis points to 2.737 percent.

Looking Ahead

While the jobs report is likely to drive trading on Friday, the reaction may be somewhat subdued due to the likely impact of the severe winter weather.

The employment numbers are still likely to overshadow a separate report from the Commerce Department on the U.S. trade balance in the month of January.