S&P 500 Struggles for Direction Ahead of Jobs Report

By Yasin Ebrahim

Investing.com -- The S&P 500 flirted between gains and losses Thursday, as investors digested data pointing to a slowdown in the labor market just a day ahead of a crucial monthly jobs report that will offer clues on the health of the economy.

The S&P 500 fell 0.1%, the Dow Jones Industrial Average fell about 0.3%, or 87 points, and the Nasdaq was up 0.21%.

The Department of Labor reported Thursday that 260,000 people filed for unemployment insurance in the week ended July 30, up 6,000 from the prior week, but in line with economists’ forecasts.

The data come ahead of Friday’s jobs report that will offer clues on the health of the economy following recent data showing the U.S. economy declined for a second-straight quarter.

Economists expect that the economy generated about 250,000 jobs in July, compared with 372,000 jobs the prior month.

The jobs report will also serve as a readthrough on the Federal Reserve’s likely path of action on monetary policy as the central bank has highlighted the strength of the labor market as evidence that the economy remains robust and is able to withstand further rate hikes.

Energy was the biggest drag on the broader market, down more than 2% as U.S. oil prices fell below $90 for the first time since Russia invaded Ukraine.

Marathon Oil (NYSE:MRO), Occidental Petroleum (NYSE:OXY), APA Corporation (NASDAQ:APA) were among the biggest decliners in the sector, with the latter down more than 8%.

Technology, however, cut losses keeping downside in the broader market in check as big tech traded mostly higher.

Elsewhere in tech, Alibaba (NYSE:BABA) gained more than 5% after reporting better-than-expected quarterly results despite the lockdowns in China holding back growth.

Consumer discretionary stocks were supported by a jump in Amazon (NASDAQ:AMZN) and Tesla (NASDAQ:TSLA) as investors look ahead to the latter’s shareholder meeting today. At the meeting, shareholders are expected to back the electric vehicle maker’s 3-for-1 stock split.

MGM Resorts (NYSE:MGM), meanwhile, jumped more than 3% after reporting quarterly earnings that missed estimates, but revenue topped expectations after more than doubling in the second quarter.

Booking Holdings (NASDAQ:BKNG), however, fell 2% after reporting mixed quarterly results as earnings beat, but revenue fell short of expectations, sending its share more than 2% lower.

Homebuilders were also in the ascendency, lifting consumer stocks, after data showing mortgage rates fell below 5% to their lowest level since April as investors price in a less hawkish Federal Reserve.

DR Horton (NYSE:DHI), Lennar (NYSE:LEN) and PulteGroup Inc (NYSE:PHM) were up more than 3%.

In other news, Coinbase (NASDAQ:COIN) jumped more than 17% after the cryptocurrency exchange inked a partnership with BlackRock (NYSE:BLK) to allow the latter’s institutional clients to invest in bitcoin.