By Anora Mahmudova and Barbara Kollmeyer, MarketWatch
Weekly jobless claims jump to highest level since May
NEW YORK (MarketWatch) -- After between small gains and losses,
U.S. stocks managed to eke out modest gains on Thursday, as
investors showcased their skittishness ahead of Friday's closely
watched jobs report.
In the spotlight today, was the announcement that the European
Central Bank will kick off a trillion-dollar plan
(http://blogs.marketwatch.com/thetell/2015/03/05/european-central-bank-live-blog-draghi-expected-to-offer-qe-details/)to
purchase government bonds and other debt on Monday. The ECB move
also provided a fillip to equity markets here and in Europe, though
the enthusiasm was tempered ahead of tomorrow's key employment
report. Analysts also noted that muted reaction to the news was a
result of skepticism about the ECB's ability to execute on the plan
and the fact that much of the European stimulus proposal already
has been factored into stock values.
Also read: Don't bet on an ECB 'taper tantrum'
(http://www.marketwatch.com/story/dont-bet-on-an-ecb-taper-tantrum-2015-03-05)
"QE in the U.S. did not work as advertised. It prevented a
collapse, but did not spur economic growth. So, there is a lot of
skepticism whether it will work in Europe," said Kim Forrest,
senior investment strategist at Fort Pitt Capital.
Outside of European woes, investors digested a raft of
weaker-than-expected economic reports, including a surprise jump in
weekly jobless claims. The Street looks at weekly claims and
private-sector job gains data to get a feeling for the official
jobs data. The consensus estimate for the nonfarm payrolls to be
released on Friday is 238,000. Separately, factory orders dropped
for the sixth straight month in January, but the decline was
smaller than expected.
The S&P 500(SPX) briefly dipped into the red, but recovered
and closed 2.53 points, or 0.1%, higher at 2,101.06.
The Dow Jones Industrial Average (DJI) added 38.82 points, or
0.2%, to 18,135.72.
The Nasdaq Composite (RIXF) ended the day up 15.67 points, or
0.3%, at 4,982.81, inching back to the psychologically significant
5,000 level reached on Monday.
Read: The 3 things most likely to kill the bull market's buzz
(http://www.marketwatch.com/story/the-3-things-most-likely-to-kill-the-bull-market-2015-03-04)
"Layoffs last week accelerated and the trend has gone up, which
disappointed investors. But factory orders were not as bad as
feared. How markets react to Friday's job report will depend on how
much emphasis investors put on bad weather," Fort Pitt Capital's
Forrest said.
Economic data: The number of people who applied for U.S.
unemployment benefits shot up to 320,000 in the week ended Feb. 28,
marking the highest level since last May. Economists polled by
MarketWatch had expected claims to fall to a seasonally adjusted
301,000.
Fourth-quarter productivity fell 2.2%, (originally down 1.8%)
while unit labor costs increased 4.1%, from an originally reported
3.1%.
Factory orders in January fell 0.2%, the sixth straight monthly
drop, the Commerce Department said Thursday. Excluding
transportation, orders fell a sharp 1.8%.
Stocks to watch: AbbVie Inc.(ABBV) said it would buy cancer
biotech Pharmacyclics Inc.(PCYC) in a $21 billion cash-and-stock
deal. Shares of Pharmacyclics jumped 10%, while shares of AbbVie
fell 5.7% making it the worst performer on the S&P 500.
Shares of Costco Wholesale Corp.(COST) rose 2.7% after the
retailer reported a quarterly profit
(http://www.marketwatch.com/story/costco-profit-up-29-helped-by-57-mln-tax-boost-2015-03-05)
that beat analysts expectations.
Joy Global Inc.(JOY), reported quarterly profits that came in
below expectations. The company also lowered its outlook for the
year and said it would speed plans to reduce costs. Shares fell
5.2%.
Other markets: European stocks climbed after the ECB left
interest rates unchanged and Draghi unveiled the details of the QE
program. Meanwhile, the euro (EURUSD) hit fresh 11-year lows
(<p>http://www.marketwatch.com/story/euro-sinks-to-fresh-11-year-low-as-ecb-looms-2015-03-05%3c/p%3e%3cp/%3e).
The Hang Seng Index
(http://www.marketwatch.com/story/chinese-stocks-decline-amid-fears-of-an-economic-slowdown-2015-03-05)
fell 1.1%, the biggest daily drop in a month after China's Premier
Li Keqiang cut the country's growth target and said "economic
downward pressure is still intensifying."
In other markets, WTI oil futures
(http://www.marketwatch.com/story/oil-fluctuates-on-chinas-lower-growth-target-libyan-supply-issues-2015-03-05-21035958)(CLJ5)
settled 1.5% lower at $50.76, giving up all the gains from the
previous session, while gold
(http://www.marketwatch.com/story/gold-looks-to-end-losing-streak-at-three-2015-03-05)(GCJ5)
settled below $1,200, falling for the fourth straight session.
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