US stocks drift lower ahead of jobs report

A trader at the New York Stock Exchange on Oct 30.
A trader at the New York Stock Exchange on Oct 30.PHOTO: AFP

NEW YORK (AFP) - US stocks drifted lower on Thursday on the eve of the highly anticipated jobs report, seen as a litmus test for a Federal Reserve increase in interest rates.

The Dow Jones Industrial Average dipped 4.15 points (0.02 per cent) to 17,863.43.

The broad-based S&P 500 lost 2.38 (0.11 per cent) at 2,099.93, while the tech-rich Nasdaq was the laggard, dropping 14.74 (0.29 per cent) to 5,127.74.

“Given nervousness ahead of the jobs report ... you see a little more risk-off mentality today,” said Michael James of Wedbush Securities.

“We’ve broadly gone through the bulk of earnings season, so the primary driver for stocks moving forwards from now to the end of the year, which is historically a very favourable period for markets, is primarily going to be what action the Fed takes, along with what direction oil prices take,” said David Levy of Kenjol Capital Management.

Falling oil prices hit Dow members Chevron and ExxonMobil, down 2.3 per cent and 1.4 per cent, respectively.

Facebook rocketed 4.6 per cent to a record US$108.76 as investors welcomed an 11 per cent rise in third-quarter profits to US$891 million (S$1.2 billion) behind a 41 per cent surge in revenues to US$4.5 billion, with big gains in mobile advertising.

Qualcomm slumped 15.3 per cent after the chipmaker projected earnings of 80-90 cents per share in the current quarter, below the US$1.08 seen by analysts.

Cybersecurity company FireEye plunged 24.9 per cent after projecting full-year revenues of US$620-US$628 million, below the US$640.8 million expected by analysts. FireEye said its business has underperformed in Europe due to macroeconomic factors and the company’s “growing pains” in the region.

Biotech company Celgene lost 5.3 per cent as it reported a US$34 million loss for the third quarter due to costs related to its acquisition of Receptos and a research venture with Juno Therapeutics.

Whole Foods Market shed 2.1 per cent as net income for the quarter ending Sept 27 dropped 56.3 per cent due in part to decline in comparable store sales.

Vacations listing service HomeAway surged 25.3 per cent on news it will be acquired by Expedia for US$3.9 billion. Expedia advanced 2.3 per cent.

Ralph Lauren Corporation gained 16.1 per cent on fiscal second-quarter earnings of $2.13 per share that easily topped expectations of US$1.74 per share. Profit margins were boosted by lower sourcing costs and less discounting.

Bond prices fell. The yield on the 10-year US Treasury rose to 2.24 per cent from 2.23 per cent Wednesday, while the 30-year advanced to 3 per cent from 2.89 per cent. Bond prices and yields move inversely.