The benchmark S&P 500 and S&P/TSX Composite indexes ended lower in choppy trading on Thursday after a short-lived boost from a string of U.S. economic reports faded and investors eyed key jobs data due on Friday. The Nasdaq finished slightly higher but the Dow also lost ground.
Markets were edgy ahead of the release of the comprehensive U.S. nonfarm payrolls data - which will likely set the stage for the Federal Reserve to begin cutting rates later this month. Canada also releases August jobs data Friday.
Early in the session, indexes gained as U.S. reports helped allay concerns of labour market deterioration. The Institute for Supply Management survey showed services sector activity expanded in August while other data showed weekly jobless claims declining last week.
But another report found U.S. private employers hired the fewest workers since January 2021 in August and data for the prior month was revised lower, potentially hinting at a sharp labour market slowdown.
“The markets have been on this risk-on risk-off roller coaster because it’s watching the data as the Fed has said ‘we’re going to watch the data,’” said Wasif Latif, president and chief investment officer at Sarmaya Partners in Princeton, New Jersey.
“The market wants some softness in the data, but it’s like a narrow pathway because the equity market in our view is priced for a soft landing or a no landing scenario whereas the bond market, given the rate cut expectations, is bit more priced for a recession,” Latif added.
September has been historically weak for U.S. equities, with the S&P 500 down about 1.2% for the month on average since 1928. The index is down more than 2.5% so far this week and tech stocks have fallen about 4.8%.
The Dow Jones Industrial Average fell 219.22 points, or 0.54%, to 40,755.75, the S&P 500 lost 16.66 points, or 0.30%, to 5,503.41 and the Nasdaq Composite gained 43.37 points, or 0.25%, to 17,127.66.
Canada’s TSX ended down 52.48 points, or 0.2%, at 22,988.28, adding to its declines on Tuesday and Wednesday.
Data on Thursday showed that Canada’s services economy contracted for a third straight month in August as firms employed less workers and wildfires contributed to a slowdown in new business.
The energy sector fell 1.5% as the price of oil held near its lowest level this year. Industrials were also a drag, falling 0.8%, and consumer discretionary ended 1.6% lower.
In contrast, consumer staples added 0.6% and heavily weighted financials were up 0.2%.
The sector was helped by a gain of 1.4% for the shares of Canadian Imperial Bank of Commerce as the lender named Jon Hountalas vice chair of North American banking.
In the U.S., eight out of 11 S&P 500 sectors lost ground, led by declines in healthcare and industrial stocks. The consumer discretionary sector led the gainers, driven partly by Tesla.
Tesla gained nearly 5% after the electric-vehicle maker said it will launch its full self-driving advanced driver assistance software in the first quarter next year in Europe and China, pending regulatory approval.
Frontier Communications slumped 10% after Verizon said it would buy the company in an all-cash deal worth $20 billion. Verizon shares dipped 0.4%.
JetBlue Airways jumped 7% after the carrier raised its third-quarter revenue forecast.
The S&P 500 posted 42 new 52-week highs and 9 new lows while the Nasdaq Composite recorded 43 new highs and 136 new lows.
Total volume across U.S. exchanges was about 10.6 billion shares, down slightly from a 20-day moving average of 10.7 billion shares.
Reuters, Globe staff