S&P, Nasdaq reverse early declines to higher edge; monthly job data

April 6 (Reuters) – The S&P 500 and Nasdaq reversed early declines on the last day of a short holiday week, with risk-conscious investors looking to monthly jobs data for a clearer picture of the economy.

Alphabet Inc (GOOGL.O) gained 2.4% on Thursday following a report that Google plans to add artificial intelligence conversational features to its search engine.

Other big technology and growth stocks such as Microsoft Corp (MSFT.O), Apple Inc (AAPL.O) and Meta Platforms Inc (META.O) also recovered early losses, gaining between 0.5% and 0.8%, leading the Nasdaq (.IXIC).

However, both the S&P 500 (.SPX) and Nasdaq are headed for weekly declines for the first time in four weeks.

Adding to a slew of data pointing to a weak labor market, initial jobless claims fell to a seasonally adjusted number of 228,000 for the week ending April 1, versus expectations of 200,000.

Labor Department data from the previous week was revised to show that 48,000 more applications had been received.

The focus now shifts to the more comprehensive report on nonfarm payrolls, which are expected to have increased by 239,000 in March, compared to the 311,000 jobs added in the previous month.

The report is expected on Friday, when the US stock market is closed for Good Friday.

Recent reports, including weak data on private payrolls and job openings earlier this week, suggested slowing demand for labor and raised hopes for a pause in the Federal Reserve’s market-punishing rate hikes.

But unlike in recent months, when evidence of a cooling economy was welcomed by investors hoping it would allow for a less aggressive Fed, softer data in recent days has increased recession fears and weighed on stocks.

“The realities of a recession period, the impact of interest rate hikes and the ripple effects we don’t yet know (roads weigh) on risky assets,” said David Keller, chief market strategist at StockCharts.com.

“The Fed’s moves seem to be working in terms of slowing the economy, but the question is how long should they continue to do so?”

Fed fund futures point to a 52.2% chance that the U.S. central bank will pause rate hikes in May, according to the CME Group’s Fedwatch tool.

Major banks, including JPMorgan Chase & Co (JPM.N) and Citigroup (CN), will be among the companies starting the quarterly reporting season next week, with investors eager to receive updates on the health of the sector following a recent banking crisis.

At 11:56 a.m. ET, the Dow Jones Industrial Average (.DJI) was down 52.07 points, or 0.16%, at 33,430.65, the S&P 500 (.SPX) was up 2.83 points, or 0, 07%, at 4,093.21, and the Nasdaq Composite (.IXIC) was up 40.02 points, or 0.33%, to 12,036.88.

Among the major stock moves, AMC Entertainment Holdings Inc (AMC.N) rose 18.3% after a US court denied the theater operator’s request to overturn a status quo order required by its stock conversion plan.

Levi Strauss & Co (LEVI.N) fell 15.1% after the clothing maker posted a decline in quarterly profits.

Falling emissions outnumbered progress at a ratio of 1.07 to 1 on the NYSE and a ratio of 1.20 to 1 on the Nasdaq.

The S&P index recorded 5 new highs in 52 weeks and no new lows, while the Nasdaq recorded 31 new highs and 137 new lows.

Reporting by Ankika Biswas and Amruta Khandekar in Bengaluru; Edited by Anil D’Silva, Arun Koyyur and Shounak Dasgupta

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