By Chibuike Oguh
NEW YORK (Reuters) -The benchmark S&P 500 index and the Dow ended lower in choppy trading on Thursday after a short-lived boost from a string of economic reports faded and investors eyed key jobs data due on Friday. The Nasdaq finished slightly higher.
Markets were edgy ahead of the release of the comprehensive nonfarm payrolls data - which will likely set the stage for the Federal Reserve to begin cutting rates later this month.
Earlier in the session, Wall Street's main indexes gained as reports helped allay concerns of labor market deterioration. The Institute for Supply Management survey showed services sector activity expanded in August while jobless claims declined last week, according to Labor Department data.
Eight out of 11 S&P 500 sectors lost ground, led by declines in healthcare and industrial stocks. The consumer discretionary sector led the gainers, driven partly by Tesla (NASDAQ:TSLA).
"The markets have been on this risk-on risk-off roller coaster because it's watching the data as the Fed has said 'we're going to watch the data,'" said Wasif Latif, president and chief investment officer at Sarmaya Partners in Princeton, New Jersey.
"The market is watching the data to get a sense of what the economy is looking like in terms of the landing scenario and what that means for interest rate policy from the Fed."
September has been historically weak for U.S. equities, with the S&P 500 down about 1.2% for the month on average since 1928. The index is down more than 2.5% so far this week and tech stocks have fallen about 4.8%.
In August, U.S. private employers hired the fewest workers since January 2021 and data for the prior month was revised lower, potentially hinting at a sharp labor market slowdown, according to the ADP (NASDAQ:ADP) National Employment Report.
"The market wants some softness in the data, but it's like a narrow pathway because the equity market in our view is priced for a soft landing or a no landing scenario whereas the bond market, given the rate cut expectations, is bit more priced for a recession," Latif added.
The Dow Jones Industrial Average fell 219.22 points, or 0.54%, to 40,755.75, the S&P 500 lost 16.66 points, or 0.30%, to 5,503.41 and the Nasdaq Composite gained 43.37 points, or 0.25%, to 17,127.66.
Tesla gained nearly 5% after the electric-vehicle maker said it will launch its full self-driving advanced driver assistance software in the first quarter next year in Europe and China, pending regulatory approval.
Frontier Communications (OTC:FTRCQ) slumped 10% after Verizon (NYSE:VZ) said it would buy the company in an all-cash deal worth $20 billion. Verizon shares dipped 0.4%.
JetBlue Airways jumped 7% after the carrier raised its third-quarter revenue forecast.
The S&P 500 posted 42 new 52-week highs and 9 new lows while the Nasdaq Composite recorded 43 new highs and 136 new lows.
Total volume across U.S. exchanges was about 10.6 billion shares, down slightly from a 20-day moving average of 10.7 billion shares.