Investors in Thursday's holiday-shortened session weighed troubling data on the U.S. jobs market and a fresh rise in oil prices
Major stock indexes finished mixed Thursday, but action in the broader market was decidedly negative in a volatile, preholiday session before a three-day weekend.
The U.S. dollar surged, and the euro fell, even though the European Central Bank hiked its benchmark interest rate. Gold futures plunged as the dollar rallied. Oil was up but off a record high of $145.85 reached earlier in the session. Bonds were lower.
In Thursday's holiday-shortened session, the Dow Jones Industrial Average rose 73.03 points, or 0.65%, to 11,288.54. Gainers on the Dow included Exxon Mobil (XOM), Chevron (CVX), JPMorgan Chase (JPM), and United Technologies (UTX).
The broader S&P 500 added 1.38 points, or 0.11%, to finish at 1,262.90. The tech-heavy Nasdaq composite index fell 6.08 points, or 0.27%, to 2,245.38.
NYSE breadth was 20-10 negative. NASDAQ breadth was 16-10 negative. Trading was sluggish.
U.S. equity markets were scheduled to close at 1:00 pm EDT Thursday. Markets will be closed on Friday in observance of the Independence Day holiday.
Traders were debating the impact of June employment data that suggest the U.S. job market is worsening.
The U.S. unemployment rate held at 5.5% in May, but nonfarm payrolls fell 62,000 in June, which was slightly worse than expected. Economists were further troubled by revised April and May figures. An additional 52,000 jobs were lost in those two months.
Separately, U.S. initial jobless claims rose 16,000 to 404,000 last week, from 388,000 the week before.
Both reports "suggest a significant pickup in the pace of deterioration in the labor market," wrote John Ryding and Conrad DeQuadros of RDQ Economics.
The U.S. ISM nonmanufacturing composite index dropped to a 48.2 in June, much weaker than expected, after dipping to 51.7 in May. Weakness was broad-based, reports Action Economics. The business activity index fell to 49.9 from 53.6. The employment component declined to 43.8 versus 48.7. New orders fell to 48.6 from 53.6. Export orders slipped to 52.0 from 54.0. Prices paid jumped to 84.5 after climbing to 77.0 in May.
Also Thursday, the European Central Bank raised interest rates, but the bank did not tip its hand on future rate moves, "which supports our view that the ECB is currently not planning further hikes," Action Economics says. That helped the value of the U.S. dollar on Thursday.
On Wednesday, the Dow and Nasdaq dropped into bear market territory, meaning they have fallen more than 20% from October's highs. All three indexes closed below their lowest closes in March, when stocks hit their lowest levels so far this year. Thursday's trading session is a short one, ending at 1 p.m. for the July 4th holiday.
Oil was climbing higher Thursday. August WTI crude oil futures were up 76 cents to
$144.33 at 1:27 pm EDT but below their intraday high of $145.85.
Among stocks in the news Thursday were drug companies announcing regulatory approvals of new products. Abbott Laboratories (ABT) announced the FDA approved the Xience V Everolimus Eluting Coronary Stent System, for the treatment of coronary artery disease.
Nvidia Corp. (NVDA) cut its expectations for second quarter revenue, to a range of $875 million to $950 million. Several analysts downgraded the stock on the news.
WD-40 Company (WDFC) posted earnings of 49 cents, vs. 44 cents a year ago, as sales rose 5.8%. Because of a higher cost of goods, the firm expects fiscal 2008 earnings of $1.78 to $1.85 per share, below analyst expectations of $1.86.
Continental Airlines (CAL) will be forced by a French judge to stand trial for manslaughter, for its role in a 2000 crash of a Concorde jet that killed 113 people in Paris.
Major European indexes finished higher Thursday after the ECB raised the benchmark refi rate one quarter-point to 4.25%, but gave no signals that additional tightenings were coming. In London, the FTSE 100 index gained 0.93% to 5,476.60. In Paris, the CAC 40 index added 1.11% to 4,343.99, while Germany's DAX index rose 0.77% to 6,353.74.
In Asia, Japan's Nikkei 225 moved 0.16% lower to 13,265.40, while Hong Kong's Hang Seng Index fell 2.13% to 21,242.78.
Treasury were mixed Thursday. Two-year Treasuries were up 01/32 to 100-19/32 for a yield of 2.56%, while the 10-year note fell 06/32 to 99-04/32 for a yield of 3.98%, and the 30-year bond lost 20/32 to 97-09/32 for a yield of 4.54%.