By Victor Reklaitis and Polya Lesova, MarketWatch
NEW YORK (MarketWatch) -- U.S. stocks fluctuated wildly Thursday
as jitters over Friday's employment report for May dominated
sentiment and as the U.S. dollar tumbled against the Japanese
yen.
Trading was very choppy during the session, with stocks moving
in and out of positive territory multiple times. In the afternoon,
stocks had fallen to session lows only to rebound and trade higher
at last check.
Ahead of the opening bell, data showed that U.S. jobless claims
fell by 11,000 to 346,000 in the week ended June 1, essentially in
line with expectations. Traders are watching labor-market data
closely for any clues as to when the Federal Reserve may begin to
scale back, or "taper," its $85-billion-a-month bond-buying
program, which has supported equity prices. (Reader poll: What do
the markets really want -- a good or bad jobs report?)
After falling as much as 116.37 points, the Dow Jones Industrial
Average (DJI) was more recently up 25 points at 14,984.
Telecommunications giant Verizon Communications Inc. (VZ) rose
3.3%, the biggest gainer in the Dow. Oil major Chevron Corp. (CVX)
fell 1.5%, the biggest decliner in the blue-chip index.
The S&P 500 index (SPX) rose 4.73 points to 1,613.66, with
telecommunications the top gainer and information technology the
biggest decliner among its 10 major industry groups.
The Nasdaq Composite (RIXF) gained 6.25 points to 3,407.
The dollar (USDJPY) slumped 1.9% on Thursday to trade at 97.13
Japanese yen.
"It all has to do with the yen carry trade," said Andrew
Brenner, head of international fixed income at National Alliance
Securities, referring to the brief afternoon selloff for stocks and
other risk assets. He said there was no specific news Thursday,
just continuing trends and more selling of the dollar versus the
yen.
"People are taking losses on the yen carry trade, and they're
forced to sell their risk assets," he said. The yen carry trade
involves selling the yen and using the proceeds to buy
higher-yielding assets.
The U.S. government's May jobs report is a day away, and the
market has been displaying jitters about it.
Marc Pado, U.S. market strategist at investment advisory firm
DowBull, said the market needs a jobs number that hits a "sweet
spot," and, in the meantime, traders can expect some hesitation in
stocks.
If the jobs number is too good, stocks could fall on worries the
Fed will taper its bond buys, but a figure that's too low also
would weigh on stocks, according to Pado. "I think that's why
you're seeing such choppy action today," he said. "What the market
needs now in order to bounce off this level is a sweet-spot number
in the middle."
The Labor Department's jobs report is slated to be released at
8:30 a.m. Eastern time Friday. Economists polled by MarketWatch
expect a rise of 164,000 in nonfarm payrolls and an unchanged
jobless rate of 7.5%.
The odds of a smaller increase in payrolls, however, grew
Wednesday after a disappointing ADP report on private-sector
jobs.
Andrew Wilkinson, chief economic strategist at Miller Tabak,
said it's a little premature to expect a rally before Friday's
payrolls report.
"I don't necessarily think the selling pressure's gone away,"
Wilkinson said. He added that the market's recent move down is
healthy and "could go on for several more weeks."
Food company J.M. Smucker Co. (SJM) was the biggest decliner in
the S&P 500, falling 4.2%.
Shares of L Brands Inc. (LTD) fell 2.6% after the company said
its monthly same-store sales rose 3%. Analysts polled by Thomson
Reuters expected a same-store-sales increase of 3.2%
Shares of SodaStream International Ltd. (SODA) added 5%.
Israel's Calcalist newspaper reported that PepsiCo Inc. (PEP) is in
talks to buy SodaStream for $2 billion. However, a PepsiCo
spokesman told MarketWatch that the report was "completely and
totally untrue."
Overseas, Japan's Nikkei Stock Average fell 0.9% and the Stoxx
Europe 600 index dropped 1.2%.
The European Central Bank kept interest rates unchanged, as
expected, and in his monthly news conference ECB President Mario
Draghi largely stuck to views he has expressed previously.
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