tocks edged lower yesterday on caution ahead of today’s all-important jobs report, but the S&P 500 still posted its best monthly gain since October 2011.
The benchmark S&P 500 advanced 5.1 per cent in January as investors cheered a compromise that temporarily postponed the impact of the “fiscal cliff” and fourth-quarter earnings were better than expected.
The S&P 500 registered its largest monthly advance since a rise of more than six per cent in October 2011 and the best January showing since a 6.1 per cent jump in 1997. For the month, the Dow gained 5.8 per cent and the Nasdaq rose 4.1 per cent.
Investors expect a pullback in equities after the recent gains, though they have bought on dips over the past four weeks. The largest daily decline on the S&P 500 so far in 2013 was Wednesday’s 0.39 per cent drop after data showed the economy contracted in the fourth quarter of 2012.
The US government is due to release January’s employment figures today at 1.30pm. Economists polled by Reuters expect non-farm payrolls to show employers added 160,000 jobs compared with a rise of 155,000 in December. The unemployment rate is likely to hold steady at 7.8 per cent.
A survey by payroll processing company ADP on Wednesday showed private sector employment rose higher than expected last month, but the government’s measure of jobless benefits claims increased last week.
The Dow Jones industrial average closed down 49.84 points yesterday, or 0.36 per cent, at 13,860.58. The Standard & Poor’s 500 Index was down 3.85 points, or 0.26 per cent, at 1,498.11. The Nasdaq Composite Index was down 0.18 points, or 0.01 per cent, at 3,142.13. Today will also bring reports on consumer confidence, U.S. manufacturing, construction spending and car sales.