U.S. stocks finished the first day of October and the fourth quarter mixed as concerns about global growth and its impact on U.S. economic health kept the desire to scoop up beaten-down stocks in check.
Investor appetite might also be held at bay ahead of a closely watched jobs report set for release Friday morning, which could influence the timing of a Federal Reserve rate increase.
Similar to the roller-coaster trading action that was the signature of the previous three months, the start of the fourth quarter began with stocks swinging from modest gains at Thursday’s open to steep declines.
Paul Nolte, a portfolio manager at Kingsview Asset Management, cited bargain-hunting on the back of losses earlier this week for helping to pull the S&P 500 and the Nasdaq Composite back into tpositive territory, although the Dow Jones Industrial Average finished a few points shy of positive territory, dragged lower by losses in Caterpillar Inc. CAT, -1.48% off nearly 1.5%, and Travelers Cos. Inc. TRV, -1.20% down 1.3%.
The S&P 500 SPX, +0.20% edged up 3.79 points, or 0.2% to close at 1,923.82. The Dow DJIA, -0.08% slid 12.69 points to finish at 16,272.01 and the Nasdaq COMP, +0.15% ticked up 6.92 points, or 0.2%, to 4,627.08.
Meanwhile, soft manufacturing data capped the upside as investors fretted over the impact of the global economy on the U.S.
The data stoked fears fear that slowing growth may be seeping into the U.S. as the Institute for Supply Management said its manufacturing index dropped to 50.2% last month from 51.1% in August. The leg lower reflected a stronger dollar and weaker global economy hampering U.S. exports of many major U.S.-made goods. A reading of more than 50 indicates a rise in activity.
“ISM manufacturing index came in barely above 50 which is in line with the weakness we are seeing globally,” Nolte said. “Earnings can’t improve if economies don’t grow.”
Jonathan Golub, chief U.S. equities strategist at RBC Capital Markets, blamed shaky stock-market trading on uncertainties stemming from a combination of hand-wringing over the timing of the Fed’s interest-rate increase, China worries and fretting about upcoming company earnings.
Nolte, however, has upbeat expectations for corporate results.
“Earnings are likely to be better than expected, and when that happens people will stop worrying about the world coming to an end,” Golub said.
Trading will likely remain volatile in the near term although the S&P 500’s ability to hold support at 1,900 was a positive sign.
Earlier Thursday, Federal Reserve Bank of Richmond President Jeffrey Lacker told The Wall Street Journal that a rate increase in October is possible. Lacker is a voting member of the Fed’s policy-setting committee and was the sole member who voted to lift rates during its September meeting.