Dipo Olowookere
By Investors Hub
The major US index futures are pointing to a modestly higher opening on Thursday, with stocks poised to extend the upward trend seen over the past several sessions.
Stocks may continue to benefit from recent upward momentum, although trading activity may be subdued ahead of the release of the closely watched monthly jobs report on Friday.
Employment is expected to rise by 90,000 jobs in September after climbing by 156,000 jobs in August. The unemployment rate is expected to hold at 4.4 percent.
Stocks turned in a relatively lackluster performance during trading on Wednesday but managed to end the day modestly higher. With the gains on the day, the major averages climbed to new record closing highs.
The major averages finished the session just above the unchanged line. The Dow edged up 19.97 points or 0.1 percent to 22,661.64, the Nasdaq crept up 2.91 points or less than a tenth of a percent to 6,534.63 and the S&P 500 inched up 3.16 points or 0.1 percent to 2,537.74.
The modestly higher close on Wall Street reflected recent upward momentum, which has helped to propel stocks higher over the past several sessions.
Buying interest was somewhat subdued, however, with traders reluctant to make more significant moves ahead of the release of the monthly jobs report on Friday.
Payroll processor ADP released a report showing a slightly bigger than expected increase in private sector employment in the month of September.
ADP said private sector employment rose by 135,000 jobs in September after surging up by a revised 228,000 jobs in August.
Economists had expected employment to climb by 125,000 jobs compared to the 237,000-job jump originally reported for the previous month.
While private sector employment rose by slightly more than expected, the increase reflected the slowest rate of job growth since last October.
“Hurricanes Harvey and Irma hurt the job market in September,” said Mark Zandi, chief economist of Moody’s Analytics. “Looking through the storms the job market remains sturdy and strong.”
A separate report from the Institute for Supply Management showed a significant acceleration in the pace of service sector growth in September.
The ISM said its non-manufacturing index jumped to 59.8 in September from 55.3 in August, with a reading above 50 indicating growth in the service sector. Economists had expected the index to inch up to 55.5.
With the much bigger than expected increase, the non-manufacturing index reached its highest level since hitting 61.3 in August of 2005.
Most of the major sectors showed only modest moves on the day, contributing to the lackluster performance by the broader markets.
Utilities stocks showed a notable move to the upside, however, with the Dow Jones Utilities Average climbing by 1.1 percent. American Electric Power (AEP) and Public Service Enterprise Group (PEG) posted strong gains.
Biotechnology and gold stocks also saw some strength on the day, while weakness was visible among trucking, banking and railroad stocks.
