Stocks ticked lower Thursday as investors looked toward key jobs data on Friday that could determine the next move for interest rates.
Consumer staples companies led the broad market index's losses Thursday. Shares of beverage company Molson Coors fell 6.3% Thursday, followed by Mondelez International and Clorox, which declined more than 5% each.
Weekly initial jobless claims came in at 207,000 for the week ending Sept. 30, up just 2,000 from the prior week's numbers. Economists had forecasted 210,000, according to a Dow Jones consensus estimate. While the slight increase in jobless claims was about in-line with the Street, it disappointed some investors hoping the weekly data would start to signal a labor market breakdown and end the run in rates that's hurting stocks.
The 10-year Treasury yield initially ticked up after the jobless claims report before inching down. It was last yielding at 4.714%.
"We're in the middle of a transition from what everybody thinks is a low rate environment, to a kind of more normalized rate environment. These adjustment periods are tough," said Horizon Investments chief investment officer Scott Ladner.
On Friday, economists polled by LSEG believe nonfarm payrolls for September will show a 170,000 increase, down from a 187,000 jobs gain in August. While investors aren't hoping for a recession, they are wishing for some labor market weakness that would cause the Federal Reserve to rethink raising rates again and halt the run in Treasury yields to 16-year highs.
Ladner is optimistic that the labor market is softening with respect to the latest jobless claims and private payrolls data.
"The totality of the labor market data is telling us that things are getting better. But they're getting better in terms of numbers getting softer [and] less hot, and doing so in the most healthy way, which is essentially less hiring, but still not very much firing," Ladner said.
Stocks got a slight boost on Wednesday after the latest payroll data from ADP signaled to investors that the labor market is beginning to loosen.
Nonetheless, the broad market index and the 30-stock Dow are on pace for a losing week. The Dow is down 1.16% week to date, and turned negative for the year during Tuesday's selloff. The S&P 500 is lower by 0.7% for the week, while the Nasdaq is about flat.
— CNBC's Yun Li contributed reporting.
Stocks close slightly lower Thursday
U.S. stocks ended Thursday down slightly.
The Dow Jones Industrial Average dropped 9.98 points, or 0.03%, to close at 33,119.57. The S&P 500 dipped 0.13% at 4,258.19, while the Nasdaq Composite fell 0.12% at 13,219.83.
— Hakyung Kim
Fed should end interest rate hiking campaign, Jeremy Siegel says
The Federal Reserve's interest rate hiking campaign should be over, University of Pennsylvania professor Jeremy Siegel said Thursday.
"There should be no question now that the Fed should be done," Siegel said on CNBC's "Closing Bell."
He pointed to uncertainties around the potential government shutdown and autoworker strike. Still, he said the real economy is still "going like fire."
Siegel added that the market could get a boost after it becomes confident that the central bank is done raising rates.
— Alex Harring