This story was updated at 4:45 p.m. EST.
U.S. stocks closed flat Thursday despite modest gains in Europe and Asia as investors look cautiously to Friday’s U.S. monthly jobs report, the second-to-last one before the U.S. Federal Reserve decides on whether to begin increasing interest rates before the end of the year. The U.S. Labor Department said Thursday the number of people applying for unemployment benefits climbed at the end of October by 16,000 to 276,000, higher than economists had expected.
"It's going to be a quiet day," Matthew Tuttle, chief executive of Tuttle Tactical Management in Stamford, Connecticut, told Reuters. "I think tomorrow's going to be where the real action is.”
Friday’s jobs report will come two days after Federal Reserve Chairwoman Janet Yellen hinted strongly that U.S. rates could begin rising next month, suggesting the U.S. economy is strong enough for borrowing rates to begin rising for the first time in nearly a decade. The comments sent the U.S. dollar to a three-month high against a basket of global currencies. Higher rates increase the cost of borrowing for business activity while a stronger dollar adversely impacts companies' overseas profits. Both factors encourage investors to seek shelter in government bonds. Higher rates also benefit savers.
The Dow Jones Industrial Average (INDEXDJX:.DJI) dropped 4.15 points, or 0.02 percent, to 17,863 Thursday morning. The S&P 500 index (INDEXSP:.INX) fell 2.38 points, or 0.11 percent, to 2,099. The Nasdaq composite (INDEXNASDAQ:.IXIC) was down 14.74 points, or 0.29 percent, to 5,128.
Seven of the 10 S&P 500 sectors were down. The financials, industrials and consumer discretionary sectors closed up. Chevron Corp. (NYSE:CVX) led declines Thursday morning among the 30 Dow components while UnitedHealth Group Inc. (NYSE:UNH) led Dow gains.
Key Asian markets closed up Thursday as the stronger U.S. dollar against the yen sent Japan’s Nikkei up 189.5 points, or 1 percent, to 19,116. The Shanghai Composite Index closed at a seven-week high, up 63.18 points, or 1.83 percent, to 3,523, on optimism over future economic stimulus measures. Hong Kong’s Hang Seng was little changed, down 2.53 points, or 0.01 percent, to 23,051
European shares edged up in Thursday afternoon trading, except for the London’s FTSE, which dropped after the Bank of England released a gloomy forecast for the British economy. France’s CAC 40 index closed up 31.75 points, or 0.64 percent, to 4,980. London’s FTSE dropped 47.98 points, or 0.75 percent, to 6,365. The German DAX gained 31.74 points, or 0.64 percent, to 10,888.
Global oil prices continued to drop for a second day after the U.S. reported higher-than-expected inventories Wednesday. West Texas Intermediate crude oil, the U.S. benchmark for oil prices, fell 2.16 percent to $45.32 per barrel for December delivery on the New York Mercantile Exchange. On the London ICE Futures Exchange, Brent crude, the global benchmark for oil prices, dropped 1.03 percent to $48.08.
Earnings-Season Thursday Market Movers
The following are some of the companies whose stock moved considerably following third-quarter earnings season reports:
SeaWorld Entertainment Inc. (NYSE:SEAS) said before markets opened in New York Thursday it grew revenue slightly in its peak summertime July-September quarter, to $496.9 million from $495.8 million. Net income grew from $88.6 million to $98.3 million, but the Orlando, Florida, theme park operator missed analysts’ forecasts on adjusted earnings per share, which pushed the company’s stock down 6.25 percent to $18.30 on Thursday. The stock is up 2.23 percent for the year.
Stock in Facebook Inc. (NASDAQ:FB) continued its rally Thursday morning after the social networking site reported better-than-expected adjusted quarterly profit of 57 cents per share after markets closed Wednesday. The company’s revenue jumped year-over-year from $3.2 billion to $4.5 billion in the July-September quarter while net income rose to $891 million from $802 million. Facebook’s shares touched their all-time high on Thursday before settling at $108.76, up 4.64 percent. Its stock has risen 39.4 percent this year.
Qualcomm Inc. (NASDAQ:QCOM) announced after markets closed Wednesday lower July-September revenue of $5.45 billion, from $6.69 billion in the year-ago period on increased competition from overseas rivals. The San Diego-based wireless technology firm lowered its profit outlook for the last three months of the year. Its profit dropped to $1.06 billion from $1.89 billion in the same quarter last year. Earnings per share plummeted from $1.11 to 67 cents in the same period. The company’s stock price plunged 15.25 percent on Thursday, to $51.07, sending its year-to-date price down 31.29 percent.
Big news from Austin, Texas, online vacation-rental arranger HomeAway Inc. (NASDAQ:AWAY) sent the company’s share price rocketing 25.31 percent on Thursday. After announcing after markets closed on Wednesday it nearly doubled its July-September quarterly revenue, to $446.8 million from $230.2 million last year, the company said it agreed to be purchased by Bellevue, Washington-based online travel agent Expedia Inc. (NASDAQ:EXPE) for $3.9 billion in cash and stock.
Stock in Whole Foods Market Inc. (NASDAQ:WFM) dropped 2.11 percent, to $30.11, on Thursday after the Austin, Texas-based upscale grocer said after markets closed Wednesday it grew revenue from $3.26 billion to $3.44 billion in the July-September quarter compared to the same period last year. The company reported adjusted profit of 30 cents per share, 4 cents below Wall Street’s forecast.