Stock Market Today: Dow Wobbles Ahead of Monthly Jobs Report as Energy Loses Steam

By Yasin Ebrahim -- The Dow slipped Thursday, as a slump in energy stocks weighed on the broader market ahead of the eagerly awaited monthly jobs report due Friday that will offer fresh insight into the health of the economy.

The Dow Jones Industrial Average fell about 0.3%, or 85 points, the Nasdaq was up 0.41%, and the S&P 500 fell about 0.1%.

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 roughly 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. But an upside surprise above 300,000 jobs would likely force markets to reassess expectations of a potential slowdown and likely weigh on stocks.  

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. A much better-than-expected jobs report, with a headline number beyond 300,000 may prove bad news for stocks as it'll likely buoy the central bank to follow through on its plan to frontload rate hikes.   

"A very strong headline number, north of 300,000 jobs, will be problematic for markets because it'll certainly give the Fed ammunition to [tighten monetary policy further]," Chief Strategist at Spouting Rock Asset Management Rhys Williams told in an interview on Thursday. Average hourly wages will also be closely watched, Rhys added, saying that a surprise fall in wages would "probably be pretty good for equities because it would show that this work is getting accomplished and they don't need to keep raising rates."

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), and APA Corporation (NASDAQ:APA) were among the biggest decliners in the sector, with the latter down more than 10%.

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 about 2% 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 1% 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 on expectations for a less hawkish Federal Reserve.

DR Horton (NYSE:DHI) and Lennar (NYSE:LEN) were up more than 3%, while PulteGroup Inc (NYSE:PHM) climbed about 2%

In other news, Coinbase (NASDAQ:COIN) jumped more than 10% after the cryptocurrency exchange inked a partnership with BlackRock (NYSE:BLK) to allow the latter’s institutional clients to invest in bitcoin.

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