Stocks closed slightly higher as the market paused after Wednesday's big gains. There was some caution in front of Friday's employment report given that initial September economic numbers came weaker than expected, says Standard & Poor's MarketScope.
The Dow Jones industrial average rose 18.6 points, or 0.2%, to 9,487.8. The broader Standard & Poor's 500 index was up 2.02 points, or 0.2%, to 1,020.24. The tech-heavy Nasdaq composite gained 3.97 points, or 0.22%, to 1,836.22.
Friday's main event is the update on employment that will be released before the market opens. The consensus forecast from economists is for the number of jobs to fall by 25,000, after a loss of 93,000 jobs in August. The unemployment rate, which is based on a separate survey of households, is forecast to rise to 6.2% from 6.1% in August.
"While most economic data that gauge activity have seen a notable acceleration over the summer, there is no indication yet that this has translated to a pickup in hiring," says MMS International. The economic research outfit expects nonfarm payrolls to rise a modest 40,000 in September, which would mark the first gain in eight months. The market will also look for confirmation of the rumored benchmark revisions, says MMS, and "signs of any reconciliation with the household survey could weigh on bonds."
Also due out Friday is the Institute for Supply Management's services index.
In economic news Thursday, initial jobless claims rose 13,000 to 399,000 for the week ending Sep. 27, from a revised 386,000 the week before. The median was for a print of 395,000. This rebound likely results from Hurricane Isabel distortions, which knocked claims lower previously. Continuing claims rose 62,000. "The data are bond friendly but may not have much conciliatory effect given overnight rumors of a sharp upward revision to previous data in tomorrow's payroll report," says economic research outfit MMS International.
Factory orders fell 0.8% in August, vs. July's 2% rise, a bit weaker than expected.
Among stocks on the move, UTStarcom (UTSI) was up sharply after the equipment maker for wireless communications raised third-quarer and 2003 guidance. CIBC World raised its earnings estimates, while Deutsche Bank upgraded the stock to hold from sell.
Caterpillar (CAT) shares rose after a report from CS First Boston says the construction equipment maker could see higher earnings per share in 2004 as a result of a big government order.
Gilead Sciences (GILD) shares were higher after Merrill raised EPS guidance, helping give other biotechs a boost also.
Walgreen (WAG) shares rose after the drug store chain reported 13% higher September same-store sales and 18% higher total sales.
Forest Labs (FRX) says it discontinued development of dexloxiglumide for the treatment of constipation predominant irritable bowel syndrome in the U.S. It notes Phase III studies were not statistically significant from the placebo group. Bank of America cut its price target to $45.
Telecommunications services stocks fell after CS First Boston cut estimates on many players in the group, including SBC Communications (SBC) and Qwest (Q).
Treasuries finished lower in price -- pushing the yield on the 10-year note up to 4.0% -- ahead of Friday's employment report. Rumors about larger than expected revisions in Friday's employment report cast a pall over interest rates, says MMS International.
European stock markets were trading mixed. There was little reaction to the European Central Bank's decision to hold interest rates steady. London's Financial Times-Stock Exchange 100 index gained 39.9 points, or 0.96%, to 4,209.1. In Paris, the CAC 40 was up 1.93 points, or 0.06%, to 3,192.94. Germany's DAX index fell 53.19 points, or 1.6%, to 3,276.64.
Asian markets finished higher Wednesday. In Japan, the Nikkei 225 index gained 232.29 points, or 2.24%, to close at 10,593.53, piggybacking Wednesday's sharp rally on Wall Street. In Hong Kong, the Hang Seng index gained 316.25 points, or 2.82%, to close at 11,546.12.