Wall St lower after rally, focus now on payrolls
Stocks were lower in see-saw trade on light volume on Thursday as investors paused after a four-day rally and awaited Friday's key payrolls report.
Wall Street initially climbed after the Institute for Supply Management's factory activity index stayed above 50, the level that indicates growth. But stocks lost altitude by midday.
After dropping more than 17 percent from early July to early August, the S&P 500 has since risen by 9 percent, leaving investors reluctant to place big bets a day ahead of the government's August labor report, which is expected to show an increase of 75,000 jobs.
The data we saw this morning suggests, based on historical trends, that we will not fall into recession right now and that in the short-term equities are still undervalued, said Brian Amidei, managing director and partner at HighTower Advisors in Palm Desert, California.
Still, high unemployment isn't going anywhere and there's an absence of volume that suggests we could result in a volatile market after the payroll report.
The Dow Jones industrial average <.DJI> was down 30.42 points, or 0.26 percent, at 11,583.11. The Standard & Poor's 500 Index <.SPX> was down 4.17 points, or 0.34 percent, at 1,214.72. The Nasdaq Composite Index <.IXIC> was down 13.36 points, or 0.52 percent, at 2,566.10.
The benchmark S&P gained more than 5 percent during the four-day rally that ended on Wednesday on increasing hopes for a new stimulus plan from the Federal Reserve at its meeting in late September.
Financials were the biggest losers on Thursday, with the S&P financial index <.GSPF> off 0.8 percent. Wells Fargo & Co
Energy stocks were the day's best performers, with Chevron Corp
Ciena Corp
The S&P retail index <.RLX> fell 0.5 percent as retailers reported August same-store sales that were slightly below expectations as Hurricane Irene drove business away from some stores. Target Corp
U.S. construction spending fell unexpectedly in July as public outlays dropped to their lowest level since December 2006 and private spending also sagged, separate data showed.
Weekly jobless claims declined by 12,000 in the latest week, while nonfarm productivity was weaker than previously thought in the second quarter.
(Editing by Leslie Adler)
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