Equities
Stocks dipped and oil prices rose as traders weighed the risk of a widening Middle East conflict and digested labour market data from the U.S.
Wall Street opened lower after a moderate rise in jobless claims sparked worries about the health of the labor market.
The Dow Jones Industrial Average fell 0.23 per cent, at the open to 42,099.53. The S&P 500 fell 0.20 per cent to 5,698.19, while the Nasdaq Composite dropped 0.37 per cent to 17,859.486 at the opening bell.
Canada’s main stock index also opened lower due to a fall in mining stocks.
At 9:31 a.m., the Toronto Stock Exchange’s S&P/TSX composite index was down 0.28 cent at 23,933.93.
On Wall Street, markets assessed earnings from Constellation Brands Inc.
Geopolitical tensions loomed large, after Israel bombed Beirut early on Thursday, following a year of clashes between Israel and Iran-backed Hezbollah and recent escalations in the region.
Traders are also eyeing key economic data on the U.S. labour market for insight into future interest rate moves from the Federal Reserve.
“Should [Friday’s] official jobs report confirm the notion of a decently performing market, equities could rebound, even if this means fewer Fed rate cuts down the road,” said Charalampos Pissouros, senior investment analyst at XM.
Overseas, the pan-European STOXX 600 was down 0.79 per cent in afternoon trading. Britain’s FTSE 100 lost 0.22 per cent, Germany’s DAX dropped 0.68 per cent and France’s CAC 40 lost 0.95 per cent.
In Asia, Japan’s Nikkei gained 1.97 per cent, while Hong Kong’s Hang Seng lost 1.47 per cent.
Commodities
Oil prices rose on Thursday on investor concern that a widening Middle East conflict could disrupt crude oil flows from the region, though a stronger global supply outlook kept a lid on gains.
Brent crude futures were up US$1.52, or 2.06 per cent, at US$75.42 a barrel. U.S. West Texas Intermediate crude futures rose US$1.58, or 2.25 per cent, to US$71.68.
Market fears are mounting over the possibility that Israel might target Iranian oil infrastructure, raising the specter of retaliation from Iran.
“From here, it’s a waiting game to see what the Israeli response will be and I suspect that comes after the conclusion of the Rosh Hashanah holiday tomorrow,” said IG market analyst Tony Sycamore, referring to the Jewish New Year.
“We could see oil prices come off and the geopolitical premium built-up in prices fade, should Israel decide to press its advantage against Hezbollah in southern Lebanon rather than retaliate directly on Iranian soil or assets,” said Harry Tchilinguirian, head of research at Onyx Capital Group.
Spot gold was down 0.5 per cent at US$2,645.38 per ounce, after hitting a record high of US$2,685.42 last week.
Currencies and bonds
The Canadian dollar weakened against its U.S. counterpart.
The day range on the loonie was 73.80 US cents to 74.11 US cents. The Canadian dollar was down about 0.36 per cent against the greenback over the past month.
The U.S. dollar index, which weighs the greenback against a group of currencies, gained 0.16 per cent to 101.90.
The euro was flat at US$1.1038. The British pound lost 1.09 per cent to US$1.3122.
In bonds, the yield on the U.S. 10-year note was up slightly at 3.817 per cent.
Economic news
Japan services and composite PMI and consumer confidence
Euro zone services and composite PMI
(8:30 a.m. ET) U.S. initial jobless claims for week of Sept. 27. Initial claims for state unemployment benefits increased 6,000 last week to a seasonally adjusted 225,000 for the week ended Sept. 28, the Labor Department said on Thursday.
(9:30 a.m. ET) Canada’s S&P Global Services PMI for September.
(9:45 a.m. ET) U.S. S&P Global Services/Composite PMI for September.
(10 a.m. ET) U.S. ISM Services PMI for September.
(10 a.m. ET) U.S. factory orders for August. Consensus is a month-over-month rise of 0.1 per cent.
With Reuters and The Canadian Press