Stocks Tread Water Ahead of Crucial Unemployment Data

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Stocks fluctuated on Thursday on a mixed bag of economic reports, while investors took a cautious approach a day before the crucial April non-farm payrolls report.

The Dow Jones Industrial Average, which hit an all-time high on Wednesday, slipped to close unofficially 21 points down and the S&P 500 was also marginally in the red. The Nasdaq rose 12 points, however, with a lift from shares of Yelp rising nearly 10 percent after the online guide to local businesses reported strong growth.

"People are getting ready for the unemployment report tomorrow, so claims being up might be a slight drag on the market," said David Kelly, chief market strategist at J.P. Morgan Funds, referring to the Labor Department's report that initial claims for unemployment benefits rose by 14,000 to 344,000 last week. The four-week moving average, considered a better measure of underlying labor market conditions as it irons out week-to-week volatility, rose only 3,000 to 320,000.

The four-week moving average, which stood at 352,000 in December, "has gone down every month" since, said Art Hogan, chief market strategist at Wunderlich Securities.

A separate report from the Commerce Department on Thursday had consumer spending jumping the most in more than four and a half years in March, up 0.9 percent.

Thursday's economic data came ahead of Friday's April employment report, with the government expected to report non-farm payrolls increasing by 210,000 last month. "We'll get a more defined market reaction tomorrow than today," said Kelly.

The dollar rose against the currencies of major U.S. trading partners and the yield on the 10-year Treasury note used in figuring mortgage rates and other consumer loans fell 3 basis points to 2.614 percent.

On the New York Mercantile Exchange, gold futures for June delivery fell 1 percent to close at $1,283.40. Crude-oil futures declined 40 cents to $99.42 a barrel.