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US close: Stocks rise but upside limited ahead of jobs report

- US data mostly beat expectations
– Markets gearing up for jobs report on Friday
– Treasury yields at two-year high

Dow Jones: 0.04%
Nasdaq: 0.27%
S&P 500: 0.12%

US indices finished in positive territory on Thursday after a list of better-than-expected economic data, but gains were trimmed by the close as investors turned nervous ahead of the all-important jobs report on Friday.

Meanwhile, benchmark US 10-year Treasury yields climbed above the psychological threshold of 3% on Thursday, rising as high as 3.005%. It settled around 2.997% as Wall Street closed, up 9.5 basis points on the day and its steepest level since July 2011.

US data released Thursday supported the call for the Federal Reserve to begin tapering asset purchases at its next meeting later this month – jobless claims fell more than forecasts, factory orders declined less than expected and the ISM non-manufacturing index smashed estimates.

However, given that the Fed has explicitly said that the labour market is a key factor in its decision, analysts will be watching the August employment report – due out on Friday afternoon – very carefully.

Consensus estimates are for a 180,000 increase in non-farm payrolls last month, up from the 162,000 gain in July. The unemployment rate is expected to remain unchanged at 7.4%, though this has already fallen speedily from 7.9% in January.

Thursday was also a busy day for equity markets worldwide with a host of central-bank policy decisions to digest – the Bank of Japan, Bank of England and European Central Bank (ECB) all decided to keep interest rates on hold and current stimulus measures in place.

Meanwhile, the G20 meeting which began in St Petersburg was likely on the back of investors’ minds, given that a potential US military strike in Syria is expected to be the hot topic amongst world leaders. Michael Hewson, Senior Market Analyst at CMC Markets, said: ‘while there may not be much in the way of fireworks we could well see a lot of tension, given the opposing views of the US and Russia, over the rationale for any type of intervention.’

Market chatter swirls around Yahoo

Internet group Yahoo edged higher after ‘market chatter’ suggested that activist investor Bill Ackman may be looking to purchase a big stake in the company.

Discount voucher group Groupon was a high riser after Morgan Stanley upgraded its rating for the stock from ‘equalweight’ to ‘overweight’.

Louisiana-Pacific surged after the building materials firm agreed to buy Ainsworth Lumber for $863m in cash and stock.

Sector peer Fastenal, the construction supplies retailer, also jumped after reporting strong sales for August.

Service sector activity at multi-year highs, ISM says

The non-manufacturing ISM index rose to 58.6% last month, up 2.6 percentage points (pp) from 56% in July. The consensus forecast was for a slight fall to 55%. ISM said this was the highest level seen since the survey’s inception in January 2008.

Monthly retail sales rose by 3.7% year-on-year in August, according to ICSC.

Factory orders fell by 2.4% month-on-month in July, down from a 1.6% gain the month before but less than the 3.4% fall predicted.

Initial weekly unemployment claims dropped by 9,000 to 323,000 in the seven days ending on August 31st (forecast: 330,000).

Labour productivity growth was revised higher to 2.3% pace in the second quarter (Consensus: 1.6%).

Companies announced 50,462 lay-offs in August, consultancy Challenger reported.

The ADP employment report, seen as a rough guide to Friday’s official data, showed that the US private sector created 176,000 jobs in August, slightly below the 184,000 increase expected. Previous month’s data was revised slightly lower.

S&P 500 – Risers
Sears Holdings Corp. (SHLD) $47.96 +6.27%
Fastenal Co. (FAST) $48.60 +6.02%
Boston Scientific Corp. (BSX) $11.57 +5.86%
J.C. Penney Co. Inc. (JCP) $14.22 +5.33%
First Solar Inc. (FSLR) $38.36 +5.18%
Nabors Industries Ltd. (NBR) $16.14 +3.53%
Rowan Companies plc (RDC) $37.18 +3.51%
Broadcom Corp. (BRCM) $26.82 +3.47%
Peabody Energy Corp. (BTU) $18.00 +3.33%
Tenet Healthcare Corp. (THC) $40.68 +3.30%

S&P 500 – Fallers
Newmont Mining Corp. (NEM) $30.30 -4.17%
Sprint Nextel Corporation (S) $6.48 -2.56%
Cabot Oil & Gas Corp. (COG) $38.45 -2.49%
Campbell Soup Co. (CPB) $41.88 -2.42%
H&R Block Inc. (HRB) $27.04 -2.38%
Deere & Co. (DE) $82.55 -2.28%
Kimco Realty Corp. (KIM) $19.83 -2.27%
Teradata Corp. (TDC) $57.51 -2.19%
L Brands Inc (LTD) $56.90 -2.13%
Iron Mountain Inc. (IRM) $25.74 -2.13%

Dow Jones I.A – Risers
Unitedhealth Group Inc. (UNH) $74.04 +0.94%
American Express Co. (AXP) $73.80 +0.90%
E.I. du Pont de Nemours and Co. (DD) $57.61 +0.66%
International Business Machines Corp. (IBM) $184.15 +0.56%
McDonald’s Corp. (MCD) $95.66 +0.53%
JP Morgan Chase & Co. (JPM) $52.11 +0.46%
Chevron Corp. (CVX) $121.37 +0.42%
Alcoa Inc. (AA) $7.87 +0.38%
Bank of America Corp. (BAC) $14.37 +0.35%
Walt Disney Co. (DIS) $61.30 +0.31%

Dow Jones I.A – Fallers
Home Depot Inc. (HD) $72.99 -1.55%
AT&T Inc. (T) $33.34 -1.19%
Coca-Cola Co. (KO) $38.24 -0.78%
Caterpillar Inc. (CAT) $82.95 -0.71%
Hewlett-Packard Co. (HPQ) $22.12 -0.67%
Travelers Company Inc. (TRV) $80.66 -0.51%
Exxon Mobil Corp. (XOM) $87.35 -0.47%
Procter & Gamble Co. (PG) $77.14 -0.45%
Merck & Co. Inc. (MRK) $47.51 -0.36%
Pfizer Inc. (PFE) $28.27 -0.35%

Nasdaq 100 – Risers
Sears Holdings Corp. (SHLD) $47.96 +6.27%
Fastenal Co. (FAST) $48.60 +6.02%
Broadcom Corp. (BRCM) $26.82 +3.47%
Sirius XM Radio Inc (SIRI) $3.80 +2.98%
Micron Technology Inc. (MU) $15.17 +2.83%
Costco Wholesale Corp. (COST) $114.62 +2.81%
Facebook Inc. (FB) $42.66 +2.11%
Liberty Media Corporation – Class A (LMCA) $143.88 +1.82%
Sandisk Corp. (SNDK) $57.97 +1.45%
Catamaran Corp (CTRX) $56.09 +1.41%

Nasdaq 100 – Fallers
Randgold Resources Ltd. Ads (GOLD) $77.87 -2.70%
Green Mountain Coffee Roasters Inc. (GMCR) $84.88 -1.65%
Expedia Inc. (EXPE) $48.18 -1.49%
Liberty Global plc Series A (LBTYA) $77.93 -1.49%
Cerner Corp. (CERN) $46.61 -1.44%
Biogen Idec Inc. (BIIB) $227.70 -1.25%
Comcast Corp. (CMCSA) $42.54 -1.21%
Fossil Group Inc (FOSL) $114.50 -1.17%
Microchip Technology Inc. (MCHP) $39.11 -1.16%
Baidu Inc. (BIDU) $132.99 -1.11%


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