U.S. equities finished near the unchanged line on Thursday in relatively quiet, uneventful trading as investors await the October nonfarm payroll report on Friday. The report (as all jobs reports have become these days) will be closely watch for clues as to the possible pace and timing of Federal Reserve interest rate hikes in the months to come.
In the end, the Dow Jones Industrial Average lost 0.1%, the S&P 500 Index gained 0.1%, the Nasdaq Composite dropped 0.2% and the Russell 2000 finished the day 0.2% lower.
Treasury bonds were weaker for the fifth consecutive day, boosting the ProShares Ultrashort Lehman 20+ Yr(ETF) (NYSEARCA:TBT) recommended to Edge subscribers to a gain of 5.5% since initiated on Aug. 16. The dollar was stronger, gold fell for its fifth session down 1.2% and oil gained 1.2% to close above the $50-a-barrel benchmark for the first time since June.
Materials stocks led the way with a 0.8% gain while healthcare was the laggard, down 0.4%. A couple of retailers were winners today, with Zumiez Inc. (NASDAQ:ZUMZ) up 15.8% on 6.3% growth in September comp-store sales vs. expectations for a decline along with raised forward guidance. Big 5 Sporting Goods Corporation (NASDAQ:BGFV) gained 10% on an upgrade from analysts at Deutsche Bank citing accelerating share gains against competitors and better profit margins.
Twitter Inc (NYSE:TWTR) fell 20.1% on reports companies including Alphabet Inc (NASDAQ:GOOG, NASDAQ:GOOGL), Apple Inc. (NASDAQ:AAPL), and Walt Disney Co (NYSE:DIS) are unlikely to make bids for the company. Negotiations are expected to wrap up before Twitter’s Oct. 27 earnings report.
And on the economic front, initial weekly jobless claims fell to the second-lowest level since 1973. Looking ahead to Friday’s jobs numbers, analysts are looking for payroll gains of 168,000 (vs. 151,000 prior) with the unemployment rate holding steady at 4.9%. Stocks have tended to rise no matter the result on jobs report Friday, as weak results were brushed off as a “no rate hike” outcome while strong reports were seen as a positive for the economy.
I expect tomorrow’s result to be no different. But watch for the reappearance of long-term bond market pressure, the return of headlines concerning the health of Deutsche Bank AG (USA) (NYSE:DB), and a possible comeback performance by GOP presidential contender Donald Trump in Sunday’s second presidential debate.
Why the apprehension?
Because measures of market breadth continue to narrow — a sign investors, for whatever reason, are feeling more and more defensive despite the steady stasis in the broad market averages.