Trading in U.S. shares was largely mixed on Thursday. It appears cautious trading was in play as investors eyed the U.S. monthly employment data to be released Friday.
Payroll processor company ADP reported that U.S. employers created 179,000 jobs in July. ADP’s report suggests that the Labor Department will likely announce positive employment data for last month. Economists on their part are eying 180,000 new jobs for July.
The labor data is closely followed by investors who are looking for clues of when the Federal Reserve might review lending rates. A bullish labor numbers should be a gauge that economic growth is picking up pace and may provide an incentive for the Fed to raise rates as soon as September. But downbeat jobs data could mean further delays in rates adjustment.
How the indexes moved
The Dow Jones Industrial Average (INDEXDJX:.DJI) skidded 0.02% after shedding 2.95 points to end the day at 18352.05. That marked the eighth time in nine sessions that the blue-chip index has moved south. But the S&P 500 (INDEXSP:.INX) rose 0.02%, while the tech-weighted NASDAQ Composite (INDEXNASDAQ:.IXIC) jumped 0.1%.
Mixed earnings continued to rattle the indexes. Metlife Inc (NYSE:MET) doused appetite for its stock after it reported a $2 billion charge related to a particular savings product that is known to be popular among boomers.
Second-quarter corporate earnings have largely been mixed. But when where companies have exceeded expectations, it has largely been because of revised down estimates.
Until Thursday, some 50 companies in the S&P 500 had said that their third-quarter earnings will be weaker, while another 23 companies said their third-quarter earnings will improve. Although as of the end of June analysts expected third-quarter earnings for companies in the S&P 500 to increase 0.5%, they now model a 1.5% decline.
“Companies lowered the numbers enough in the second quarter to beat them, but they’re back to lowering third-quarter numbers,” observed Alliance Bernstein Holding LP’s Chief Investment Officer, Jim Tierney.
Vacation weighing on markets
Some analysts also say that the holding pattern seen in equity markets could a result of traders taking vacations this August.
“The markets are quiet, and they’ll stay quiet the next three weeks,” said O’Neil Securities’ Kenny Polcari.