US stocks little changed

New York - US stocks were little changed amid jobs data that showed steady growth in the labour market that probably won’t force the Federal Reserve to rush to tighten monetary policy.

The S&P 500 rose 0.2% to 2 165.58 at 9:31 in New York. The Dow Jones Industrial Average climbed 51.16 points, to 18 210.

Stocks are virtually unchanged for the week as investors speculate whether the world’s biggest economy is robust enough to cope with higher borrowing costs.

Employers added 156 000 jobs in September, showing the labour market is settling into a pace that will support the economy as the Federal Reserve considers tightening monetary policy as soon as next month.

The median forecast in a Bloomberg survey of economists called for a 172 000 advance. The jobless rate rose to 5% as the labour participation rate ticked up.

"People were very worried that interest rates were going to mover higher, sooner, especially if the number came in stronger than expected," said Matt Maley, an equity strategist in New York at Miller Tabak & Company.

"We didn’t see that and, at the very least, it puts it off until after the election. The Fed officers speaking today will be important."

The odds for a Fed rate hike in December have increased to 62% from 53% last week, while traders are pricing in a 24% chance of an increase as early as November.

Officials have indicated a desire to tighten policy to a more normal level, while signalling that the pace of rate increases would be gradual so as not to knock economic growth off kilter.

Fed Vice chairperson Stanley Fischer is among four central-bank officials slated to speak today.

“There are still signs of overall health in a very tight labor market,” said Tony Bedikian, head of global markets for Citizen’s Bank in Boston.  

“This still leaves a likely December hike on the table here. I don’t think this report sways the Fed in terms of holding back from tightening.”

The S&P 500 trades at 16.8 times its members’ earnings, compared with global stocks’ valuation of 15.5 times and 14.8 for the Stoxx Europe 600 Index.

The upcoming earnings season, which Alcoa unofficially kicks off on October 11, will be closely watched for further indications of the health of corporate America.

Analysts forecast a 1.5% contraction in three-month profit for S&P 500 members, which would be a sixth straight quarterly, drop.

Read Fin24's top stories trending on Twitter:

Brent Crude
All Share
Top 40
Financial 15
Industrial 25
Resource 10
All JSE data delayed by at least 15 minutes morningstar logo
Company Snapshot
Voting Booth
Please select an option Oops! Something went wrong, please try again later.
I'm not really directly affected
18% - 1625 votes
I am taking a hit, but should be able to recover in the next year
23% - 2138 votes
My finances have been devastated
34% - 3196 votes
It's still too early to know what the full effect will be
25% - 2318 votes