U.S. stocks retreated Thursday, as investors digested more employment data while the situation in the Middle East remained extremely volatile.
By 09:35 ET (13:35 GMT), the Dow Jones Industrial Average contract was down 95 points, or 0.2%, the S&P 500 index traded 15 points, or 0.3%, lower and the NASDAQ Composite dropped 80 points, or 0.5%.
Middle East hits risk assets Risk sentiment has been hit hard this week by the escalation of the conflict in the Middle East, with Israel now considering its possible response to an aerial bombardment from Iran earlier in the week.
“Escalation in the Middle East has led markets to price in a greater risk of a fully-fledged conflict in the region, which could potentially involve the US,” analysts at ING said, in a note.
Jobless claims set stage for payrolls Traders also remain wary ahead of Friday’s key nonfarm payrolls report, which is likely to set the market’s direction ahead of the Federal Reserve’s next rate-setting meeting.
The number of Americans who turned in first-time claims for state unemployment benefits rose by more than anticipated last week, but did not stray too far from a four-month low touched in the prior week.
Seasonally-adjusted initial jobless claims climbed to 225,000 in the week ended on Sept. 28, increasing from an upwardly-revised mark of 219,000 last week, data from the Labor Department showed on Thursday. Economists had anticipated 222,000.
The earlier reading for the week ended on Sept. 21 was 218,000 -- the lowest since mid-May.
There is more economic data to digest later Thursday in the form of the services activity numbers for September.
Levis Strauss slumps In the corporate sector, Levi Strauss (NYSE:LEVI) stock fell 9% after the jeans maker announced it has put its Dockers brand under review for a possible sale and lowered its group-wide full-year revenue forecast.
Tesla (NASDAQ:TSLA) stock also dropped 0.4%, adding to the previous session’s losses on disappointing third-quarter deliveries, after the U.S. National Highway Traffic Safety Administration said the EV manufacturer was recalling 27,185 Cybertruck vehicles in the U.S. as a delayed rear view image reduces visibility behind the vehicle.
Crude retains strength Oil prices rose Thursday as the escalating violence in the Middle East raised concerns that crude flows could be disrupted from this key exporting region.
By 09:35 ET, the Brent contract climbed 2.3% to $75.55 per barrel, while U.S. crude futures (WTI) traded 2.6% higher at $71.94 per barrel.
Traders are waiting for Israel’s response to Iran firing more than 180 missiles into its territory on Wednesday, amid concerns it could target Iranian oil infrastructure.
Meanwhile, U.S. crude inventories rose by 3.9 million barrels to 417 million barrels in the week ended on Sept. 27, the Energy Information Administration said on Wednesday, compared with expectations for a 1.3 million-barrel draw.
