Markets close lower in week still marked by gains

A choppy day of trading Thursday ended with stocks broadly lower on Wall Street, although U.S. indexes have managed to hold on to most of their sizeable gains from a big rally at the start of the week.

The S&P 500 fell 1% after having been up 0.4% in the early going. The benchmark index is up 4.4% for the week following its best two-day rally since the spring of 2020.

Selling was widespread Thursday, with roughly 80% of the stocks in the S&P 500 ending in the red. The Dow Jones Industrial Average fell 1.1%, while the Nasdaq composite lost 0.7%. The Russell 2000 index of smaller company stocks closed 0.6% lower.

Treasury yields gained ground and put more pressure on stocks. The yield on the 10-year Treasury, which helps set rates for mortgages and many other kinds of loans, rose to 3.81% from 3.75% late Wednesday. The yield on the two-year Treasury, which more closely tracks expectations for Federal Reserve action, rose to 4.22% from 4.14% late Monday.

Investors were reviewing the latest data Thursday on jobs, which showed more Americans filed for unemployment benefits last week. Traders will be watching closely today when the federal government releases its monthly job market data for September.

The job market has been a particularly strong area of an otherwise slowing economy. Any sign that the job market is weakening could factor into the the Fed’s future decisions to either remain aggressive or ease up on future interest rate increases.

Wall Street analysts expect the federal government to report today that the U.S. added 250,000 jobs last month, well below the average of 487,000 a month over the past year, but still a strong number that suggests the labor market is healthy despite chronic inflation and two straight quarters of economic contraction.

On Thursday, the S&P 500 fell 38.76 points to 3,744.52. The Dow dropped 346.93 points to close at 29,926.94. The Nasdaq slid 75.33 points to 11,073.31. The Russell 2000 fell 10.18 points to 1,752.51.

Technology, financial and health care stocks were among the biggest weights on the market. Intel dropped 1.7%, Citigroup Inc. fell 1.8% and Johnson & Johnson fell 1.9%.

Energy stocks mostly rose as the price of U.S. crude oil increased 0.8%. Marathon Oil Corp. gained 3.9%.

More broadly, the global economy has also been hit hard by record inflation and lingering uncertainty over Russia’s invasion of Ukraine. That conflict continues to hang over energy costs worldwide, but especially for Europe. The International Monetary Fund is once again lowering its projections for global economic growth in 2023 and said the risks of a recession are rising.

Investors will soon get more information on just how hard inflation is squeezing businesses and consumers when companies start reporting their third-quarter financial results this month.

More importantly, Wall Street will be listening closely to what executives say about expectations for the remainder of the year and into 2023.