NEW YORK (Reuters) - U.S. stocks ended steady on Thursday as a mixed quarterly earnings season winds down, but Treasury yields fell to two week lows as investors hedged positions ahead of the monthly U.S. government employment report due on Friday.
The U.S. Labor Department’s jobs report is forecast to show nonfarm payrolls rose by 202,000 in April while the unemployment rate holds steady at 5.0 percent.
Average hourly earnings are forecast to rise 0.3 percent for the month, taking the year-on-year increase to 2.4 percent, but still below the 3.0 percent gain that economists say is needed for inflation to rise to the Fed’s 2.0 percent target.
“The question for non-farm payrolls is the perennial one: how much will the report move the needle for the Fed?” said Aberdeen Asset Management investment manager Luke Bartholomew in London. “The market has pretty much written off a June hike and is skeptical that the Fed will manage even one this year.”
Wall Street stocks ended little changed with firmer oil prices helping the energy sector but weak earnings undermining the stocks of retailers.
“Investors are in a wait-and-see mode till we get some direction from the jobs report,” said Terry Sandven, chief equity strategist at U.S. Bank Wealth Management in Minneapolis.
“Equities appear to be in need of further proof that the economy and earnings will improve in the second half of the year, and I expect the market to trend generally sideways till mid-year,” he said.
Amazon (AMZN.O) fell 1.8 percent to $659.09 while the S&P retail stock index .SPXRT was down 1.5 percent and the S&P consumer discretionary index .SPLRCD fell 0.6 percent.
The Dow Jones industrial average .DJI ended up 0.05 percent at 17,660.71, the S&P 500 .SPX ended down 0.02 percent at 2,050.63 and the Nasdaq Composite .IXIC dropped 0.18 percent, to 4,717.09.
MSCI’s all-country world equity index .MIWD00000PUS slipped 0.2 percent to at 395.42.
U.S. Treasury yields fell, with benchmark 10-year yields US10YT=RR hitting their lowest level since April 18 of 1.735 percent as traders positioned for what they anticipated to be a below-expectations U.S. jobs figure.
The number of Americans filing for unemployment benefits rose by the most since February 2015 in the latest week and earlier this week data showed private employers in the United States added 156,000 jobs in April, the weakest gain in three years.
“Weekly jobless claims came in a bit higher than expected, and when you combine them with the ADP report from yesterday, that raises the possibility the national employment report tomorrow could be a bit on the softer side,” said Michael Sheldon, chief investment officer at Northstar Wealth Partners in West Hartford, Connecticut.
U.S. crude oil prices initially jumped 5.0 percent, with a huge wildfire near Canada’s oil sands region and escalating tensions in Libya stoking concerns among investors of a near-term shortage in supply, but pared gains on what traders said was likely profit-taking.
Firmer oil prices lifted shares of major European oil producers, while encouraging European earnings updates from firms including telecoms group BT (BT.L) and oil company Repsol (REP.MC) helped prop up the stock market. The gains in European shares came after four days of losses.
U.S. crude oil settled up 54 cents, or 1.23 percent, at $44.32 a barrel CLc1 while Brent crude prices LCOc1 settled up 39 cents, or 0.87 percent, at $45.01 a barrel.
The U.S. dollar edged up against major currencies for a third day, as the yen slipped again as doubts persist about the direction of Bank of Japan policy, while concerns about a possible U.K. exit from Europe weighed on sterling.
The dollar index .DXY, which measures the greenback’s value versus six currencies, rose to its highest level in a week of 93.862 after falling to its lowest in over 15 months on Tuesday of 91.919.
The dollar also rose against the yen JPY= to a six-day high of 107.49 yen after hitting an 18-month low on Tuesday of 105.52 yen.
Sterling fell against the dollar for a third straight day on Thursday after weak British services sector data added to concerns that the economy is stumbling in the run-up to a vote on whether Britain should quit the European Union.
Sterling fell to a 10-day low of $1.4444 GBP=D4, well below a four-month high of $1.4770 struck on Tuesday.
U.S. gold futures GCcv1 settled down 0.2 percent at $1,272.30 an ounce.
Additional reporting by Tanya Agrawal in Bengaluru and Dion Rabouin, Barani Krishnan and Richard Leong in New York; editing by Clive McKeef