NEW YORK (Reuters) - Wall Street closed lower on Thursday as energy shares were weighed down by falling crude prices while U.S. treasury yields rose and gold prices fell as investors bet U.S. jobs on Friday could help prompt an interest rate hike as soon as next month.
A day after Federal Reserve Chair Janet Yellen referred to December as a “live possibility” for a U.S. rate hike, investors were waiting for Friday’s key monthly nonfarm payrolls report to gauge if the data is strong enough to prompt a liftoff.
“This is a big piece of data as to what the Fed is looking for. If it shows up weak we may not get a rate hike,” said Scott Colyer, chief executive officer of Advisors Asset Management in Monument, Colorado, adding that stocks could rise on a strong jobs number as it would be a good sign for the economy.
“I think everybody wants them to move or not move. The month-to-month stuff is killing everybody,” he said as the market has been whipsawed all year by speculation on timing of a rate hike.
The Dow Jones industrial average fell 4.15 points, or 0.02 percent, to 17,863.43, the S&P 500 lost 2.38 points, or 0.11 percent, to 2,099.93 and the Nasdaq Composite dropped 14.74 points, or 0.29 percent, to 5,127.74.
Weak oil prices weighed on energy and a slump in gold and copper dragged on the materials sector. Energy shares led the S&P decline with a 1 percent drop. Interest-rate-sensitive utilities were the next weakest sector, followed by materials.
U.S. two-year Treasury yields hit their highest in 4-1/2 years on Thursday on intensifying expectations for a December Fed liftoff, while long-dated yields also rose on fresh corporate supply.
“There is a fair amount of corporate issuance out there today, and that has been a big contributor to the price action,” said Ian Lyngen, senior government bond strategist at CRT Capital in Stamford, Connecticut.
The dollar rose against most major currencies, hitting a more than two-month high versus the yen on bets for a rate hike. The dollar index, measuring the greenback against a basket of major currencies, rose 0.04 percent.
Thursday’s data showed that the United States last week had its biggest rise in jobless claims in eight months, while third-quarter productivity gained after a drop in self-employment caused overall hours worked to fall for the first time in six years, restraining costs.
Gold and Copper were both weighed down by the prospect of a December rate hike. Gold fell as low as $1,102.35 an ounce to its weakest since Sept. 15 in its seventh straight session of declines.
The Philadelphia SE Gold/Silver index was down 4.5 percent and copper fell 2.4 percent, hitting its lowest since Sept. 11.
Oil futures extended the previous session’s rout, as an oversupply of crude and weak gasoline prices continued to weigh. U.S. crude futures settled down 2.4 percent at $45.20 a barrel and Brent crude settled down 1.2 percent at $47.98. [O/R]
Additional reporting by Sam Forgione and Barani Krishnan in New York, Clara Denina in London and Abhiram Nandakumar in Bengaluru; Editing by Richard Chang and James Dalgleish