RBS Royal Bank of Scotland Group PLC

By Riva Gold 

Stock markets were near break-even on Thursday, as investors bought bank shares and sold bond-proxies ahead of Friday's jobs report.

Futures pointed to a small opening gain for the S&P 500, while the Stoxx Europe 600 was flat late morning after swinging between small gains and losses.

European bank shares advanced, with shares of Germany's Deutsche Bank up 1.2% and Royal Bank of Scotland Group up 2.1%.

Meanwhile, the real estate and utilities sectors--which as dividend-payers tend to perform best in an ultralow-interest rate environment--declined. U.S. utilities shares fell for a ninth-straight day on Wednesday, in their longest losing streak since 2002, ahead of Friday's employment report.

Gold also pulled back 0.3% to $1,264 an ounce after posting its biggest daily loss since 2013 earlier in the week.

A strong jobs report could bolster the case for the Federal Reserve to raise interest rates in December. Current economic conditions provide a "strong case" to raise short-term interest rates "more rapidly," Federal Reserve Bank of Richmond President Jeffrey Lacker said on Wednesday.

Minutes from the European Central Bank's last meeting are also expected to be closely watched later Thursday following recent concerns among investors about the end of its program of quantitative easing.

Bonds sold off earlier in the week following a media report that the ECB might begin tapering, which the central bank subsequently denied. The yield on the 10-year German government bond fell slightly to minus 0.042% on Thursday, while yields on 10 year U.S. Treasurys also retreated slightly to 1.699% from 1.718% following four consecutive days of gains. Yields move inversely to prices.

Wall Street shares ended higher on Wednesday, bolstered by a climb in oil prices and upbeat data on the U.S. services sector. Oil prices reached their highest settlement value since June on Wednesday after data showed that U.S. stockpiles fell for a fifth consecutive week, but that rally cooled on Thursday, with Brent crude oil last flat at $51.86 a barrel.

In currencies, the British pound fell 0.3% against the dollar to $1.2726. The WSJ Dollar Index, which measures the dollar against a basket of 16 currencies, inched up 0.1%, with the dollar slightly firmer against the euro and yen.

Harriet Torry contributed to this article.

Write to Riva Gold at riva.gold@wsj.com

(END) Dow Jones Newswires

October 06, 2016 05:50 ET (09:50 GMT)

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