Investors Wait for Payroll Numbers

Stocks remained close to the break-even level on Thursday as the major stock indices were mixed, making small moves.

Anticipation concerning Friday morning’s release of the all-important, non-farm payrolls report for December kept investors in a risk-averse mood. The Nasdaq 100 made a more significant, 0.41 percent decline after Bed, Bath & Beyond (NASDAQ:BBBY) sank 12.46 percent and a number of “momentum” stocks, such as Tesla (NASDAQ:TSLA) and Micron (NASDAQ:MU) lost momentum, dropping more than two percent.

The Dow Jones Industrial Average (NYSEARCA:DIA) lost 17 points to finish Thursday’s trading session at 16,444 for a 0.11 percent decline. The S&P 500 (NYSEARCA:SPY) rose 0.03 percent to finish at 1,838. The Nasdaq 100 (NASDAQ:QQQ) declined 0.42 percent to finish at 3,552. The Russell 2000 (NYSEARCA:IWM) advanced 0.08 percent to end the day at 1,158.

In other major markets, oil (NYSEARCA:USO) declined 0.24 percent to close at $33.08. On London’s ICE Futures Europe Exchange, March futures for Brent crude oil declined 71 cents (0.67 percent) to $106.00/bbl. (NYSEARCA:BNO). February gold futures declined $1.90 (0.15 percent) to $1,227.50 per ounce (NYSEARCA:GLD).

Transports were in warp drive on Thursday, as the Dow Jones Transportation Average accelerated 1.10 percent, sending the iShares Dow Jones Transportation Index ETF (NYSEARCA:IYT) to a record-high close of $132.11 after reaching a record intraday high of $132.47.

In Japan, stocks took a hard fall following a downbeat report from HSBC, which considered the nation’s stock market “underweight”. HSBC emphasized that because so much of Japan’s manufacturing is done in other countries, the weaker yen would have less of an impact in causing Japanese exports to be more competitively priced in foreign markets (NYSEARCA:FXY). The Nikkei 225 Stock Average sank 1.50 percent to 15,880 (NYSEARCA:EWJ).

Stocks declined in China after Great Wall Motor released a forecast of a sales slowdown, which caused the nation’s entire automotive sector to slump. The Shanghai Composite Index fell 0.82 percent to 2,027 (NYSEARCA:FXI). Hong Kong’s Hang Seng Index dropped 0.91 percent to 22,787 (NYSEARCA:EWH).

In Europe, stocks declined after European Central Bank President Mario Draghi gave a downbeat outlook for the Eurozone economy, when he explained the need for keeping interest rates low “for an extended period”. The Euro STOXX 50 Index declined 0.66 percent to 3,090 on Thursday — remaining above its 50-day moving average of 3,041. Its Relative Strength Index is 56.84 (NYSEARCA:FEZ).

Technical indicators revealed that the S&P 500 rose further above its 50-day moving average of 1,798 after advancing 0.03 percent to finish Thursday’s trading session at 1,838. Its Relative Strength Index rose from 61.98 to 62.25. The MACD is heading further below the signal line, which would suggest that the S&P could resume its decline during the immediate future.

On Thursday, five sectors advanced and four sectors declined. The technology sector took the hardest hit, falling 0.65 percent.

Consumer Discretionary (NYSEARCA:XLY): -0.02%
Technology: (NYSEARCA:XLK): -0.65%
Industrials (NYSEARCA:XLI): +0.48%
Materials: (NYSEARCA:XLB): -0.39%
Energy (NYSEARCA:XLE): -0.31%
Financials: (NYSEARCA:XLF): +0.36%
Utilities (NYSEARCA:XLU): +0.59%
Health Care: (NYSEARCA:XLV): +0.75%
Consumer Staples (NYSEARCA:XLP): +0.52%

Bottom line: The major stock indices held close to the break even level on Thursday, as investors awaited Friday morning’s release of the highly anticipated December non-farm payrolls report from the Bureau of Labor Statistics.

John Nyaradi is the author of The ETF Investing Premium Newsletter.

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