U .S. stocks posted modest gains Thursday as investors await Friday's closely watched jobs report, which could offer insight about the U.S. economy and help determine whether the Federal Reserve raises interest rates again next month.
Many believe the likelihood of another rate increase in March has faded because of recent signs of weakness in the global economy. That has sent the dollar lower against other currencies, a welcome change for U.S. exporters whose overseas sales have been hurt by the appreciation of the dollar over the last year and a half.
The Dow Jones industrial average rose 79.92 points, or 0.5%, to 16,416.58. The Standard & Poor's 500 index rose 2.92 points, or 0.2%, to 1,915.45 and the Nasdaq composite rose 5.32 points, or 0.1%, to 4,509.56.
Stocks oscillated between gains and losses the whole day, and got some traction in the last couple of hours of trading. Industrial and materials companies were among the biggest gainers, helped by a weaker dollar.
Investors are getting ready for Friday's payroll numbers. Economists surveyed by FactSet forecast that U.S. employers created 200,000 jobs in January and that the unemployment rate held steady at 5%.
In recent weeks, investors have scaled back expectations that the Fed will continue raising interest rates amid signs that the global slowdown in growth is beginning to hurt the U.S. economy.
On Wednesday, a private survey found that the U.S. service sector grew in January at the slowest rate in nearly two years. Fed fund futures, a security that allows investors to bet on which way the Fed will move interest rates, are indicating that the next best chance the Fed will raise rates is not until early 2017.
“The market is starting to price in a small chance of recession, not some realistic chance, but enough of a chance to give investors pause and reposition,” said Khoa Le, co-leader of a derivatives trading desk at Credit Suisse.
Diminished expectations of a Fed rate hike in March have continued to weaken the dollar. The euro rose 0.9% to a three-month high of $1.1208, and the dollar fell 1.1% against the Japanese yen to 116.79 yen.
Le said the large move in the dollar in recent days is partially related to a great unwinding of positions by both large investors and companies that might hold significant amounts of cash overseas.
Many investors were “buying into this thesis of a strong dollar,” Le said. “Now that the Fed is less likely to raise rates, we are seeing clients reposition.”
U.S. government bond prices rose. The yield on the 10-year Treasury note fell to 1.85% from 1.89%.
In other company news, mobile video camera maker GoPro plunged 93 cents, or 9%, to $9.78 after the company reported a disappointing fourth-quarter loss. GoPro shares are down 46% in 2016.
Viacom rose $1.11, or 2%, to $48.68 after the company announced that 92-year-old Sumner Redstone was stepping down as chairman.
It was an usually quiet day for energy commodities, which for several days had experienced wild swings. Benchmark U.S. crude edged down 56 cents to $31.72 a barrel on the New York Mercantile Exchange. The contract jumped 8% on Wednesday in New York. Brent crude, a benchmark for international oil prices, fell 58 cents to $34.46 a barrel in London.
Other energy commodities were mixed. Heating oil rose less than a penny to $1.081 a gallon, wholesale gasoline rose 1.5 cents to $1.0284 a gallon and natural gas fell 6.6 cents to $1.972 per thousand cubic feet.
In metals, gold rose $16.30 to $1,157.60 an ounce, silver rose 11.6 cents to $14.85 an ounce and copper rose 3.7 cents to $2.1315 a pound.
MORE FROM BUSINESS