U.S. stocks closed little changed on Thursday, the last day of trade for the week, as investors eyed a soft jobs report and were on edge ahead of Greece's Sunday referendum. ( Tweet This )
The Nasdaq and S&P 500 ended just below the flatline after attempting slight gains in the close, with utilities advancing and biotechs reversing an earlier loss. Trade volume was light ahead of the Independence Day holiday on Friday.
"I think Greece is weighing on markets—the uncertainty and the lack of resolution. It's taken longer than most people were expecting," said Stephen Freedman, senior investment strategist at UBS Wealth Management Americas. Still, "it's good to know the fundamentals of the U.S. economy are solid given the geopolitical risks elsewhere."
Greek Prime Minister Alexis Tsipras said in a Dow Jones report the leaders will have a deal 48 hours after the referendum. He added that if "no" wins, he will be in Brussels the next day and sign a deal.
The International Monetary Fund warned on Thursday in the preliminary draft of its latest debt sustainability report that Greece would need an extension of its European Union loans and a large debt writeoff if it grows more slowly than expected and economic reforms are not implemented, Reuters said. The document added that Athens needs about 51.9 billion euros between October 2015 and December 2018.
The Greek stock exchange and local banks remained closed for a fourth day in a row on Thursday. Talks between Greece and its international lenders are now postponed until after Sunday's referendum on the country's bailout terms.
European Central Bank leaders plan to discuss emergency funding for Greek banks on Monday, a source familiar with the situation told Reuters.
The debt crisis has fueled concerns that the country could become the first to leave the 19-member euro zone— an uncertainty that has kept global markets on edge.
"At the end of the day you may see more pressure on stocks because we have this Greece referendum on Sunday and a three-day weekend," said JJ Kinahan, chief strategist at TD Ameritrade. The problem with "the whole Greece situation, even if we know how the vote comes out, is we don't know what to make of the whole situation."
Stocks gave up opening gains to trade mildly lower. Initial declines in biotechs and Apple weighed on the Nasdaq to underperform for much of the day. Utilities jumped more than 1 percent to lead gains in the S&P 500 as Treasury yields fell.
The Dow transports edged higher as JetBlue jumped 2.8 percent. Southwest, United and Delta failed to recover from a selloff in airlines on Wednesday following news of a Department of Justice investigation.
The jobs report is "bit of a disappointment. I thought we'd get a higher number based on ADP yesterday. And the other thing is wage growth is flat," Kinahan said. Another discouraging factor he noted was the downward revision to the previous months' reports.
Those negative points don't rule out a September rate hike, but could reduce the number of increases this year to one from the previously signaled two, he said.
Futures pared gains after initially rising modestly on U.S. nonfarm payrolls that showed creation of 223,000 jobs and an unemployment rate of 5.3 percent, both slightly lower than expectations. However, that decline in unemployment was due to a sharp fall in labor force participation to its lowest level since October 1977.
"I think the real issue is the number of people who have left the workforce or have given up," said Chris Abts, president and founder of Cornerstone Retirement Group.
"Obviously the economy continues to move slowly in all directions but this is not enough to change anything," he said.
Hourly wages for June were unchanged. May's figures were revised lower, down to 254,000 jobs from 280,000 and wage growth of 0.2 percent.