Stocks in Holding Pattern on Eve of Jobs Report
Investors nibbled at tech shares Thursday but made few other commitments ahead of today’s February employment report, leaving stocks mixed in another lethargic session on Wall Street.
The dollar climbed to a four-month high against the yen on speculation that Japan’s Ministry of Finance was loading up on greenbacks to weaken its own currency. The dollar held steady against the euro after the European Central Bank agreed to keep its key short-term interest rate at 2%.
In other trading, yields on U.S. Treasury bonds eased slightly. Crude oil, which fell Wednesday, rebounded 84 cents to $36.64 a barrel.
The stock market’s major indexes drifted in and out of positive territory, as they have for much of the week ahead of the February employment report due today.
Many investors are intently watching monthly job-creation numbers for signs that the economy is accelerating.
“There’s been a lot of speculation about where the number might come in and how the market might react, so it makes sense for this to be a bit of a directionless day,” said Brian Pears, head equity trader at Victory Capital Management in Cleveland.
The Dow Jones industrial average, which traded in a narrow, 45-point band, closed down 5.11 points at 10,588.00.
Broader gauges were higher. The Nasdaq composite index advanced 21.75 points, or 1.1%, to 2,055.11, as gains among semiconductor stocks helped it finish in positive range after two down days. The Standard & Poor’s 500 was up 3.84 points, or 0.3%, at 1,154.88.
Winners topped losers by 5 to 3 on the New York Stock Exchange and by about 2 to 1 on Nasdaq.
Economic data on Thursday were mixed. The Commerce Department said orders to factories fell by 0.5% in January. But Labor Department data showed that the number of new applications filed for unemployment benefits was lower in the latest week.
In the bond market, many investors are worried that a higher-than-expected February job gain today could drive bond yields higher, on the assumption that the Federal Reserve would be closer to tightening credit.
In the stock market, however, “There may be some concern that the Fed will start to act, but the natural response to that is: ‘Well, let’s hope so!” ’ said John Caldwell, chief investment strategist for McDonald Financial Group. “An environment that would drive the Fed to lower rates again is much more scary than a sustainable economic recovery with jobs growth.”
Among Thursday’s market highlights:
* Chip maker Intel rose 61 cents to $29.65 in regular trading, then fell as much as 90 cents to $28.75 after hours, following the company’s announcement that its first-quarter profit probably would miss analysts’ forecasts.
Other chip-related stocks rising in regulator trading included Broadcom, up 91 cents to $42.17, and KLA Tencor, up $1.15 to $53.25.
* Internet stocks attracted buyers. Ask Jeeves soared $8.30 to $29.01 after announcing an acquisition. Other winners included DoubleClick, up 65 cents to $11.35; Yahoo, up 77 cents to $44.13; and FindWhat.com, up $2.48 to $20.23.
* Home builders resumed their recent rally. Centex rose $2.73 to $111.70, KB Home gained $1.69 to $77.19 and Ryland jumped $2.78 to $90.60.
* Drug giant Merck gained 67 cents to $47.78 after reaffirming its earnings forecast for the first quarter and the year.
* No. 1 retailer Wal-Mart Stores rose 69 cents to $61.05, and Target gained 18 cents to $43.77. Each reported better-than-expected sales.
* European markets were mostly higher, despite the ECB decision to hold rates steady. ECB President Jean-Claude Trichet said euro-zone monetary policy remained appropriate, dimming rate-cut expectations.
Many in the market had been on alert for comments from Trichet indicating a European rate cut may be imminent. Germany and France have argued recently that a rate cut was needed to weaken the euro currency. The strong euro has been hurting European exporters.
Trichet “didn’t seem to be leaving the door open too much for a rate cut,” said Steven Englander, chief currency strategist for North America at Barclays Capital in New York.
