U.S. stocks end lower, resume a multiday slide ahead of Friday jobs report
Joy Wiltermuth
15 hours ago
U.S. stocks finished lower Thursday, with the three big equity indexes on pace for weekly losses, ahead of Friday's monthly jobs report from the Labor Department.
By Joy Wiltermuth and Joseph Adinolfi
Dow fell in 10 or past 13 trading sessions
U.S. stocks finished lower while Treasury yields eased as investors awaited Friday’s monthly jobs report from the Labor Department.
What happened
The Dow Jones Industrial Average#phrase-index?ref=INDEX%7CDJIA;onlineSignificance=prominentDJIA shed 9.98 points, or less than 0.1%, to end at 33,119.57, marking a fall in 10 of the past 13 trading sessions, according to Dow Jones Market Data.
The S&P 500 SPX fell 5.56, or 0.1%, closing at 4,258.19.
The Nasdaq Composite COMP slipped 16.18 points, or 0.1%, finishing at 13,219.83.
On Wednesday, the Dow Jones Industrial Average rose 0.4%, to 33,130, snapping a three-day losing streak, while the S&P 500 gained 0.8%, to 4,264 for its biggest percentage-point gain in three weeks, FactSet data show.
What drove markets
Investors were staying cautious ahead of Friday’s jobs report for September, even with a slight pullback in long-term Treasury yields that have been battering stocks.
“The jobs report is kind of critical this time,” said Randy Frederick, managing director of trading and derivates at Schwab Center for Financial Research, by phone Thursday afternoon.
He sees a chance that a stronger-than-expected labor report could spark a deeper selloff in stocks and feed fears of more rate hikes to come from the Federal Reserve as it seeks to keep inflation coming down.
See: U.S. jobs report forecast: 170,000 new workers and 3.7% unemployment
“I don’t think the equity markets like good news right now,” Frederick said. “Especially not with high rates, a high dollar and high oil prices beating up the markets.”
Treasury yields slipped for a second day Thursday morning, as investors digested a batch of fresh economic data. The yield on the 10-year Treasury note BX:TMUBMUSD10Y slipped 2 basis points to 4.715%, below the 16-year high reached earlier this week, but above a September low near 4.3%.
“But after three big days up, that doesn’t do a whole lot,” Frederick said. “Because the overall trend is clearly a bit higher.”
Rising Treasury yields, particularly on the long end of the yield curve, have been widely blamed for driving the selloff in stocks that has taken place since early August.
In economic data, a weekly report on jobless-claims data showed no sign that layoffs have been increasing. Rising layoffs are seen as a necessary prerequisite for the Federal Reserve to start easing its monetary policy, which has weighed on both stocks and bonds since early 2022. Government data showed the number of Americans who applied for unemployment benefits last week rose slightly to 207,000, but remained near pandemic-era lows.
Investors also received data on the U.S. international trade deficit which suggested some weakness in consumer spending, but analysts chiefly blamed the jobless claims numbers for the impact on yields and stocks.
“Financial markets have been rattled in the last few days,” said Bill Adams, chief economist for Comerica Bank. “The yield on the 10-year Treasury note has jumped about 0.6 percentage points since the beginning of September, extending a steady march higher since the early summer.”
“There are competing explanations for the surge in interest rates and they have very different implications. Treasury issuance is way up this year with a higher deficit, and the Fed is no longer a buyer; rising interest rates would be the classic warning that the deficit is starting to crowd out private-sector access to capital. But Treasury yields rose in August, too, even though the Federal government ran a monthly surplus in the month.”
Several senior Fed officials were speaking on Thursday, including San Francisco Fed President Mary Daly, who said interest rates can be held steady if the labor market and inflation continue to cool, according to Bloomberg.
Choppy trading in recent days sent the Cboe VIX index VIX, a gauge of expected equity-market volatility, to 20 for the first time in four months as stocks tumbled. Some analysts see a near-term rebound ahead, but many argue the direction of bond yields remains critical for stocks.
Joy Wiltermuth
15 hours ago
U.S. stocks finished lower Thursday, with the three big equity indexes on pace for weekly losses, ahead of Friday's monthly jobs report from the Labor Department.
By Joy Wiltermuth and Joseph Adinolfi
Dow fell in 10 or past 13 trading sessions
U.S. stocks finished lower while Treasury yields eased as investors awaited Friday’s monthly jobs report from the Labor Department.
What happened
The Dow Jones Industrial Average#phrase-index?ref=INDEX%7CDJIA;onlineSignificance=prominentDJIA shed 9.98 points, or less than 0.1%, to end at 33,119.57, marking a fall in 10 of the past 13 trading sessions, according to Dow Jones Market Data.
The S&P 500 SPX fell 5.56, or 0.1%, closing at 4,258.19.
The Nasdaq Composite COMP slipped 16.18 points, or 0.1%, finishing at 13,219.83.
On Wednesday, the Dow Jones Industrial Average rose 0.4%, to 33,130, snapping a three-day losing streak, while the S&P 500 gained 0.8%, to 4,264 for its biggest percentage-point gain in three weeks, FactSet data show.
What drove markets
Investors were staying cautious ahead of Friday’s jobs report for September, even with a slight pullback in long-term Treasury yields that have been battering stocks.
“The jobs report is kind of critical this time,” said Randy Frederick, managing director of trading and derivates at Schwab Center for Financial Research, by phone Thursday afternoon.
He sees a chance that a stronger-than-expected labor report could spark a deeper selloff in stocks and feed fears of more rate hikes to come from the Federal Reserve as it seeks to keep inflation coming down.
See: U.S. jobs report forecast: 170,000 new workers and 3.7% unemployment
“I don’t think the equity markets like good news right now,” Frederick said. “Especially not with high rates, a high dollar and high oil prices beating up the markets.”
Treasury yields slipped for a second day Thursday morning, as investors digested a batch of fresh economic data. The yield on the 10-year Treasury note BX:TMUBMUSD10Y slipped 2 basis points to 4.715%, below the 16-year high reached earlier this week, but above a September low near 4.3%.
“But after three big days up, that doesn’t do a whole lot,” Frederick said. “Because the overall trend is clearly a bit higher.”
Rising Treasury yields, particularly on the long end of the yield curve, have been widely blamed for driving the selloff in stocks that has taken place since early August.
In economic data, a weekly report on jobless-claims data showed no sign that layoffs have been increasing. Rising layoffs are seen as a necessary prerequisite for the Federal Reserve to start easing its monetary policy, which has weighed on both stocks and bonds since early 2022. Government data showed the number of Americans who applied for unemployment benefits last week rose slightly to 207,000, but remained near pandemic-era lows.
Investors also received data on the U.S. international trade deficit which suggested some weakness in consumer spending, but analysts chiefly blamed the jobless claims numbers for the impact on yields and stocks.
“Financial markets have been rattled in the last few days,” said Bill Adams, chief economist for Comerica Bank. “The yield on the 10-year Treasury note has jumped about 0.6 percentage points since the beginning of September, extending a steady march higher since the early summer.”
“There are competing explanations for the surge in interest rates and they have very different implications. Treasury issuance is way up this year with a higher deficit, and the Fed is no longer a buyer; rising interest rates would be the classic warning that the deficit is starting to crowd out private-sector access to capital. But Treasury yields rose in August, too, even though the Federal government ran a monthly surplus in the month.”
Several senior Fed officials were speaking on Thursday, including San Francisco Fed President Mary Daly, who said interest rates can be held steady if the labor market and inflation continue to cool, according to Bloomberg.
Choppy trading in recent days sent the Cboe VIX index VIX, a gauge of expected equity-market volatility, to 20 for the first time in four months as stocks tumbled. Some analysts see a near-term rebound ahead, but many argue the direction of bond yields remains critical for stocks.
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Summary
U.S. stocks declined on Thursday, marking a drop in 10 out of the past 13 trading sessions as investors awaited the September jobs report from the Labor Department. The Dow Jones Industrial Average, S&P 500, and Nasdaq Composite all finished lower. This comes after a slight pullback in long-term