US stocks end flat ahead of jobs report.
New York – The S&P 500 and the Nasdaq closed slightly higher on Thursday in a choppy start to the fourth quarter as investors waited for the monthly US jobs report and the quarterly earnings season. At the closing bell, the Dow Jones Industrial Average fell 13 points, or 0.1 per cent, to 16,272 after a volatile session that at one point had it trading more than 1 per cent lower. After starting with a brief rally, stocks fell before edging up again after the latest in a spate of volatile trading days for an equities market where rallies quickly evaporate amid uncertainty about the global economy and US interest rates.
Many investors were holding fire ahead of Friday’s crucial US nonfarm payrolls data and the third-quarter earnings season which starts with Alcoa’s report on October 8. “We’re going to get a number investors can sink their teeth into tomorrow and next week kicks off earnings season which is vitally important to the direction of stocks for the rest of the year,” said Jack Ablin, chief investment officer at BMO Private Bank in Chicago. Analysts expect Friday’s jobs report will show the US economy added 205,000 jobs in September and the unemployment rate was unchanged at 5.1 percent, a seven-year low. Meanwhile unless we get a lousy jobs number tomorrow I think the Fed is going to be on the hook to explain themselves if they’re not going to raise,” he said.
Stocks fell around the globe in the third quarter, driven by renewed fears of slowing growth in China and uncertainty over the US Federal Reserve’s plan to raise interest rates. Dunkin’ Brands Group, parent of baked goods and coffee chain Dunkin’ Donuts, slumped 12.2 percent after estimating 2015 comparable sales growth at 1.0-3.0 percent at US Dunkin’ Donuts restaurants. The coming earnings season may not provide much relief for stocks, as companies continue to grapple with an economic slowdown, a stronger US dollar and low oil prices. The utilities index’s fell 1.2 percent after rising 2.6 percent in September when nervous investors preferred more defensive sectors in a shaky market.
Ralph Bassett, head of North American equities at Aberdeen Asset Management, said he has been more cautious recently about buying stocks that have fallen, given the uncertain outlook for earnings. “Do you really want to continue to add on weakness given the lack of visibility?” he said. “Typically, it’s our nature to add on weakness, but you need to have conviction that it’s going to work out over the medium term,” he added. Economic reports in the US were mixed Thursday, including a weak manufacturing reading and employment data that remained broadly consistent with an improving labour market. Shares of Twitter fell 8.4 percent to $24.68, after a report that co-founder and interim Chief Executive Jack Dorsey was expected to be named permanent CEO. Declining issues outnumbered advancing ones on the NYSE by 1,733 to 1,262, for a 1.37-to-1 ratio on the downside; on the Nasdaq, 1,774 issues fell and 952 advanced for a 1.86-to-1 ratio favouring decliners. More than 7.54 billion shares changed hands on US exchanges, slightly ahead of the 7.25 billion average for the previous 20 sessions, according to Thomson Reuters data.
A private gauge of nationwide manufacturing activity, the Caixin China manufacturing PMI, was down slightly at 47.2 in September, a six-year low, compared with 47.3 in August. “Investors are well aware of the impending economic slowdown,” Jeremy Batstone-Carr, chief economist and strategist at London-based brokerage and wealth manager Charles Stanley, said. Still, he’s not calling for a rebound in global stocks just yet. “I’d be concerned about sounding the all clear, particularly as we head into the reporting season,” he said. Verified email addresses: All users on Independent Media news sites are now required to have a verified email address before being allowed to comment on articles.