U.S. equity markets traded along the unchanged line Thursday as oil prices calmed and traders awaited the all-important February jobs report on Friday.
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Traders parsed the latest reading on the U.S. service sector from the Institute for Supply Management. The ISM gauge slipped to 53.4 last month from 53.5 in January. The reading was above expectations calling for a slightly larger decline to 53.2 and above the line of 50 that separates expansion from contraction.
The ISM non-manufacturing employment index, though, slipped into contraction for the first time since February 2014.
The service sector, which accounts for nearly three-quarters of the U.S. economy, has performed better than the manufacturing sector in recent months as factory activity across the world has slumped and global-growth concerns have raged.
ISM data on the manufacturing sector, out on Tuesday, showed some improvement in the factory sector, though it remained in contraction territory. The ISM gauge rose to 49.5 last month from 48.2 in January. The expectation was for a shallower rise to 48.5.
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Thursday’s ISM services figures come after financial information services firm Markit’s gauge of the U.S. service sector slipped into contraction territory, seeing the weakest performance 28 months. The reading came in at 49.8 from 53.2 the month prior, and below the line of 50 that separates expansion from contraction.
Weekly Jobless Claims
The number of Americans filing for first-time unemployment benefits rose last week to 278,000 from an unrevised 272,000 the week prior. Economists expected claims to fall to 271,000.
The data comes just a day before the closely-watched non-farm payrolls report due out on Friday. Economists expected to see the U.S. economy add 190,000 new jobs last month, up from a 151,000 increase the month prior. January’s figures came in much weaker than the 190,000 gain that had been forecast, but the unemployment rate ticked lower, while labor force participation and wage growth moved slightly higher.
Data from payroll processor ADP on Wednesday showed private payrolls added 214,000 jobs in February, surpassing the 190,000 estimate. January’s figures were revised lower by 12,000 to 193,000.
Global crude oil prices were higher on Thursday, but took a bit of a breather from sharp gains and losses of recent months.
In recent action, West Texas Intermediate crude added 1.36% to $35.13 a barrel, while Brent, the international benchmark, gained 0.76% to $37.21 a barrel.
On Wednesday, data from the Energy Information Administration confirmed the American Petroleum Institute’s figures that showed a bigger-than-expected build in inventories last week. The EIA data showed crude stockpiles saw the biggest increase since April as they jumped 10.37 million barrels, well above the expected 3.6 million-barrel gain.
Adding to the less-than-enthusiastic sentiment on Thursday was no fresh action by global oil producers to move to cap or slash production. Talk had been swirling for weeks about a possible production freeze at January levels among some of the nation’s biggest producers. So far, no final action has been taken, but investors are monitoring the situation closely.
The wholesale chain’s shares slumped on Thursday after the company reported disappointing fiscal second-quarter earnings results late Wednesday night. Costco said same-store sales rose 5%, which came in below the 5.4% expectation as lower traffic and the strong U.S. dollar dented profits.
Earnings of $1.24 a share were below the $1.35 a share the company earned during the same period in the prior year and the expectation for $1.28 in 4Q. Revenue, meanwhile, rose to $28.17 billion, but missed forecasts for $28.43 billion.