Stocks Move Mostly Lower Amid Caution Ahead Of Jobs Report - U.S. Commentary

(RTTNews) - With traders expressing caution ahead of tomorrow's monthly jobs report, stocks moved mostly lower during trading on Thursday. The Dow closed lower for the sixth consecutive session, falling to a six-month closing low.

The major averages ended the day firmly in negative territory but off their lows for the session. The Dow slid 120.72 points or 0.7 percent to 17,419.75, the Nasdaq tumbled 83.50 points or 1.6 percent to 5,056.44 and the S&P 500 fell 16.28 points or 0.8 percent to 2,083.56.

The weakness on Wall Street partly reflected trepidation ahead of the Labor Department's monthly jobs report due on Friday, which could have a significant impact on the outlook for interest rates.

A strong report would likely add to speculation that the Federal Reserve will raise rates in September, while a weak report could provide ammunition for more dovish central bankers to argue that the rate hike should be delayed.

Economists expect the report to show an increase of about 212,000 jobs in July following the addition of 223,000 jobs in June. The unemployment rate is expected to hold at 5.3 percent.

The Labor Department released a report this morning showing that first-time claims for unemployment benefits edged slightly higher in the week ended August 1st.

The report said initial jobless claims edged up to 270,000, an increase of 3,000 from the previous week's unrevised level of 267,000. Economists had expected jobless claims to rise to 273,000.

With the modest increase, jobless claims climbed further off the more than forty-year low of 255,000 set in the week ended July 18th.

Continued weakness among media stocks also weighed on the markets, with Viacom (VIA) and 21st Century Fox (FOXA) posting steep losses after reporting disappointing quarterly results.

Entertainment giant Disney (DIS) also posted a notable loss on the day, once again contributing to the lower close by the Dow.

Additionally, shares of Keurig Green Mountain (GMCR) fell sharply after the specialty coffee and coffeemaker company reported weaker than expected third quarter revenues and lowered its full-year guidance.

Fitness tracking device maker Fitbit (BIT) also moved notably lower on the day after reporting that its profit margins fell during the second quarter.

Meanwhile, shares of Weight Watchers (WTW) spiked higher after the weight loss company reported better than expected second quarter earnings and raised its full-year guidance.

Sector News

Biotechnology stocks moved sharply lower over the course of the trading session, dragging the NYSE Arca Biotechnology Index down by 4.2 percent. With the drop, the index fell to its lowest closing level in almost a month.

Agios Pharmaceuticals (AGIO) helped to lead the biotech sector lower, plunging by 10.6 percent after reporting a wider than expected second quarter loss.

Considerable weakness also emerged among tobacco stocks, as reflected by the 2.3 percent loss posted by the NYSE Arca Tobacco Index. Alliance One (AOI) posted a particularly steep loss on the day.

Semiconductor stocks also came under significant selling pressure, resulting in a 1.8 percent drop by the Philadelphia Semiconductor Index. The index ended the session at a nine-month closing low.

Healthcare, software, and retail stocks also saw notable weakness on the day, while gold, energy and steel stocks bucked the downtrend.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Thursday. Japan's Nikkei 225 Index crept up by 0.2 percent, while Hong Kong's Hang Seng Index fell by 0.6 percent.

Meanwhile, the major European markets all moved lower on the day. While the German DAX Index fell by 0.4 percent, the U.K.'s FTSE 100 Index and the French CAC 40 Index both edged down by 0.1 percent.

In the bond market, treasuries regained some ground after pulling back sharply over the two previous sessions. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 3.4 basis points to 2.234 percent.

Looking Ahead

The monthly jobs report will be in the spotlight on Friday, with reaction to the data likely to drive trading throughout the session.