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A seesaw day for stocks

Published 06/10/2016

The market drifted between gains and losses
The market drifted between gains and losses

Stocks recovered from a broad decline to end mixed on Thursday, a day ahead of a key jobs report.

The market fell from the start, then drifted between gains and losses for much of the afternoon. Yields on Treasury bonds rose again, and the price of oil climbed past 50 dollars a barrel for the first time since June.

By the end of trading, seven of the 11 sectors of the Standard and Poor's 500 index rose, led by suppliers of basic materials. Health care companies and phone companies led the decliners.

The S&P 500 inched up 1.04 points, or 0.05%, to 2,160.77. The Dow Jones industrial average fell 12.53 points, less than 0.1%, to 18,268.50. The Nasdaq composite slipped 9.17 points, or 0.2%, to 5,306.85.

A report showing a low number of Americans seeking jobless benefits last week added to recent data suggesting that the economy is strengthening and that the Federal Reserve is likely to raise interest rates soon. Super-low rates have helped fuel the seven-year bull market.

Investors reacted just as they did to solid numbers on the manufacturing and service sectors earlier in the week: They sold Treasury bonds, sending yields up. The yield on the 10-year note rose to 1.74% from 1.71% on Wednesday, and is now up nearly two tenths of a point in a week, a big move.

Still, stocks investors generally showed little conviction, with none of the industry groups of the S&P 500 moving more than 0.8% in either direction.

On Friday, investors will get a clue on how quickly rates may rise when a report on the number of jobs created last month is released.

In stocks making moves on Thursday, Twitter plunged 5 dollars, or 20%, to 19.87 dollars on reports that some companies that were believed to be interested in buying it will not. Rumours of a deal had sent Twitter up 33% in the 11 trading days through Wednesday.

Mylan slumped 1.19 dollars, or 3%, to 36.84 dollars following reports the company overcharged Medicaid over five years for its EpiPen allergy treatment.

Investors will turn their attention to the start of corporate earnings next week. Companies in the S&P 500 are expected to report that earnings per share fell 2% in the third quarter compared to the year earlier period, according to FactSet, a data provider. That would mark the sixth quarter in a row in declines.

That is a remarkable development given that stocks are near record highs, though many investors expect this so-called earnings recession to end in the fourth quarter this year.

In currency markets on Thursday, the dollar continued its climb. It rose to 104.14 yen, its highest level in a month, from 103.64 yen. The euro slipped to 1.1141 dollars from 1.1212 dollars.

In European trading, Germany's DAX and France's CAC-40 each shed 0.2%. Britain's FTSE 100 slipped 0.5%.

The British pound continued to drop on concerns that the country is moving ahead with its decision to the leave the European Union and could exit the bloc's tariff-free single market. The pound fell 0.8% to 1.2608 dollars, its lowest level since the June 23 vote to leave the EU.

US benchmark crude oil rose 61 cents to close at 50.44 dollars a barrel in the New York, its first close above 50 dollars a barrel since June 23.

Brent crude, the international standard, rose 65 cents to close at 52.51 dollars a barrel in London. Wholesale gasoline edged up less than 1% to 1.50 dollars a gallon, heating oil rose 1 cent to 1.60 dollars a gallon and natural gas rose less than 1 cent to 3.05 dollars per 1,000 cubic feet.

The price of gold slumped 15.60 dollars to 1,253 dollars an ounce, silver fell 35 cents to 17.35 dollars an ounce and copper lost 1 cent to 2.16 dollars a pound.


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