Caution the order of the Wall St day
US stocks fell yesterday as investors turned cautious a day ahead of a crucial government report on July employment, and took profits after recent strong gains.
The stock market’s second day of declines came on the heels of a four-day rally that pushed US indexes on Tuesday to close at their highest levels since last fall.
Losses were broad-based, with the consumer staples and telecommunications services sectors among the drags on the S&P 500. An S&P index of consumer staples stocks fell 0.9 per cent, while an S&P index of telecom services shares lost 1.2 per cent.
Procter & Gamble shares fell for a second day after posting an 11 per cent drop in quarterly sales on Wednesday. In yesterday’s session, P&G’s stock lost 4.5 per cent to close at $51.46. It was the top drag on the Dow.
Another Dow component, Cisco Systems, the world’s largest network equipment manufacturer, also weighed on sentiment as its chief executive John Chambers said that it’s too soon to call a recovery.
After losing ground in morning trading, Cisco rose 0.6 per cent to close at $22.308 on the Nasdaq.
Wall Street’s attention is now on the government’s all-important non-farm payrolls report, which will show the number of jobs lost in July when it is released before the bell today.
Analysts forecast that the Labor Department report will show 320,000 workers lost their jobs in July, the least for any month since September last year.
The Dow Jones industrial average declined 24.71 points, or 0.27 per cent, to 9,256.26. The Standard & Poor’s 500 Index fell 5.64 points, or 0.56 per cent, to 997.08. The Nasdaq Composite Index slid 19.89 points, or 1 per cent, to 1,973.16.
Shares of low-cost wireless carrier MetroPCS plunged almost 30 per cent to close at $8.99 after posting disappointing quarterly results.
Despite the latest pullback, the broad S&P 500 is up 47.4 per cent from its 12-year closing low in early March. The rally has been driven by a string of economic data suggesting a recovery, and an earnings season with most S&P 500 companies beating expectations.