NEW YORK, Oct 2 (Reuters) - U.S. stocks were flat on Thursday as a positive reading on the labor market was not enough to entice buyers even after a sharp decline in the previous session.
While momentum in markets have been weak of late - the S&P 500 closed under its 100-day moving average for the first time since Aug. 7 on Wednesday - major indexes remain a few percentage points away from record levels. The lack of follow-through to Wednesday’s weakness could suggest traders will once again use the decline as a buying opportunity.
“A lot of people got freaked out yesterday, and it is natural to have a selloff, but I don’t see any reason for why we’d continue to fall,” said James Altucher, managing director at Formula Capital in New York. “In the long run, anyone holding the market now will win big.”
Stocks fell on Wednesday after a patient was diagnosed with Ebola in the United States, sparking a broad decline that hit airlines and transportation stocks especially hard.
“I would look for any stock that sold off on Ebola, because the market’s reaction to the swine flu (in 2009) suggests some amazing opportunities are being created,” Altucher said.
The NYSE ARCA Airline index rose 1.7 percent while Delta Air Lines was up 3 percent to $35.93. The company also reported a modest improvement in its September load factor on Thursday.
The Russell 2000 rose 0.4 percent and is now about 9.9 percent below a record closing high hit earlier this year. On Wednesday the small cap index closed down more than 10 percent from its record, putting it into correction territory.
Investors continue to watch small-caps, considered a leading sector of the market. Some market participants are concerned the weakness could spread throughout Wall Street. However, the Russell also underwent a sharp pullback earlier this year, which didn’t lead to similar losses in the S&P as investors continued a trend of buying on market declines.
The Dow Jones industrial average was falling 6.97 points, or 0.04 percent, to 16,797.74, the S&P 500 was gaining 1.26 points, or 0.06 percent, to 1,947.42 and the Nasdaq Composite was adding 7.70 points, or 0.17 percent, to 4,429.78.
The number of Americans filing new claims for unemployment benefits unexpectedly fell last week, a sign the labor market may be tightening.
Advancing issues were outnumbering declining ones on the NYSE by 1,602 to 1,101, for a 1.46-to-1 ratio on the upside; on the Nasdaq, 1,500 issues were rising and 720 falling for a 2.08-to-1 ratio favoring advancers.
The benchmark S&P 500 index was posting 1 new 52-week highs and 21 new lows; the Nasdaq Composite was recording 8 new highs and 47 new lows. (Editing by Bernadette Baum and Nick Zieminski)