Updated from 4:23 p.m. EDTThe action in U.S. stocks was muted Thursday as traders elected to hold their ground ahead of the monthly jobs report. The Dow Jones Industrial Average rose 6.26 points, or 0.04%, to 13,974.31, and the S&P 500 added 3.25 points, or 0.21%, at 1542.84. The Nasdaq Composite was up 4.14 points, or 0.15%, at 2733.57. Declines in transportation sector indices matched advances in utilities, which lead to the weak advances of the major averages. The Nasdaq Transportation Index slid 0.6% and the Dow Jones Transportation Average slipped 0.2%. On the other hand, the Dow Jones Utilities Average rose 1% and the Philadelphia Utility Index added 0.9%. Breadth was positive. On the New York Stock Exchange, 2.73 billion shares changed hands, as advancers topped decliners by a 5-to-3 margin. Volume on the Nasdaq reached 1.71 billion shares, with winners outpacing losers nearly 8 to 7. Early on, traders were treated to another round of economic data. In one report, the Labor Department said initial jobless claims rose a greater-than-expected 16,000 to 317,000, above the consensus 310,000. Ian Shepherdson, chief economist with High Frequency Economics, said the increase in jobless claims "restores claims more or less to their trend level, after two unexpected declines. These declines were due in part to relatively friendly seasonals but more to a drop in unadjusted claims compared to their prior trend. This has now largely reversed."
While the claims data won't affect Friday's nonfarm payrolls data for September, it is the last available information on the job market before the key report. The release is expected to show that the U.S. economy added 100,000 jobs last month after an abysmal August number, when 4,000 jobs were lost. Many cite that weak nonfarm payrolls report as the reason the Federal Reserve cut its fed funds target rate by 50 basis points when it last met on Sept. 18. The September data should figure prominently when the Federal Open Market Committee next convenes for a two-day meeting on Oct. 30. "Tomorrow's employment report should help provide more light on the health of the all-important U.S. jobs market and economy," said Michael Sheldon, chief market strategist with Spencer Clarke LLC. "Despite the many headwinds out there, the Fed is now in the game, and I still think the economy avoids a recession and instead muddles through a few more quarters of subtrend growth." Also on the economic docket, the Census Bureau said factory orders slid 3.3% in August, after a 3.4% rise in July. Analysts were looking for a 2.8% decline. Overseas, the European Central Bank left interest rates unchanged as it gathered in Vienna. Separately, the Bank of England came out with an announcement that it would not change key interest rates. The euro climbed against the dollar on the news.
European bourses finished little changed following the announcement from the ECB. London's FTSE 100 climbed 0.2%, while Germany's Xetra Dax was flat. Asian markets, on the other hand, lost ground overnight. Japan's Nikkei 225 dropped 0.6%, and Hong Kong's Hang Seng surrendered 1.8%. Among U.S. equities, several companies were out with earnings. Family Dollar ( FDO) said fiscal fourth-quarter earnings rose 17% from a year ago and topped the Thomson First Call estimate by a penny. Constellation Brands ( STZ) posted a second-quarter profit that beat expectations, and the company lifted its full-year outlook. Despite the earnings beat, Family Dollar shed 91 cents, or 3.3%, to $26.53. Constellation, on the other hand, rose 38 cents, or 1.5%, to close at $25. Elsewhere, Marriott International ( MAR) fell 4.6% after the hotel operator said third-quarter profit fell 7% from a year ago, although results did beat Wall Street's target. However, Marriott offered fourth-quarter guidance below estimates, and the stock eased $2.04 to $42.28. Other companies were out with profit warnings. Retailer Wet Seal ( WTSLA) cut its third-quarter forecast after the last close, and shares tumbled 18.6%. NutriSystem ( NTRI) dove 33.6% after it also offered a weak third-quarter outlook. Among analyst calls, Wachovia initiated coverage on several tech names. The firm gave an outperform rating to Intel ( INTC), Nokia ( NOK), Dell ( DELL) and Hewlett-Packard ( HPQ).
Wachovia also started coverage of IBM ( IBM), Sun Microsystems ( JAVA), Qualcomm ( QCOM), Motorola ( MOT) and Texas Instruments ( TXN) at market perform. Commodities were stronger. Crude oil overcame early weakness and finished up $1.50 to $81.44 a barrel. Gold and silver finished the day with gains. U.S. Treasury securities rallied on the long end. The 10-year note was up 11/32 in price, cutting the yield to 4.52%. The 30-year bond added 21/32, yielding 4.76%.