LONDON: U.S. stocks ended Thursday’s session modestly lower for a second consecutive day as investors turned cautious ahead of an important employment report due Friday.
The main indexes swung between small gains and losses before settling slightly lower, as investors were pricing in a possible rate hike in December following hawkish signals from Federal Reserve officials. On Thursday, Dennis Lockhart, the president of the Atlanta Fed, joined the hawkish chorus, saying the case for a rate hike will “continue to firm up.”
The S&P 500 SPX, -0.11% closed 2.38 points, or 0.1%, lower at 2,099.93, with seven of its 10 main sectors finishing in negative territory. Energy, utilities and materials led the decliners, while financials and consumer discretionary stocks rose modestly.
“The mild pullback over the past two days is probably more due to a quiet consolidation after a big run-up over the previous few weeks. It’s normal and healthy for the market at this point,” said Arthur Hogan, chief market strategist at Wunderlich Securities.
Hogan said that continued hawkish messages from the Federal Reserve signaling a December rate increase are likely holding markets back.
“The dollar has gone up, which knocked commodities, especially oil. And energy and materials are selling off as oil went from trading at $48 a barrel yesterday morning to $45 today [Thursday],” Hogan said.
The ICE U.S. Dollar Index DXY, -0.05% a gauge of the dollar’s strength against a basket of six rival currencies, rose over the past two sessions to 98.
The Dow Jones Industrial Average DJIA, -0.02% finished fractionally lower, down 4.15 points at 17,863.43.
The Nasdaq Composite COMP, -0.29% ended the day down 14.74 points, or 0.3%, at 5,127.74, as a renewed drop in biotechnology stocks weighed on the index. The iShares Nasdaq Biotechnology ETF IBB, -1.92% fell nearly 2%.
Impressive quarterly earnings from Facebook Inc. and Ralph Lauren Corp., which boosted futures before the market open, weren’t enough to buoy stocks, as the energy and biotech sectors weighed on broader markets.
