S&P 500, Dow slip ahead of key jobs data

The benchmark S&P 500 index and the Dow slipped 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 traded 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 S5HLTH and industrial S5INDU stocks. The consumer discretionary sector S5COND led the gainers, driven partly by Tesla 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."

The Dow Jones Industrial Average DJI fell 160.92 points, or 0.39%, to 40,814.05, the S&P 500 SPX lost 8.61 points, or 0.16%, to 5,511.53 and the Nasdaq Composite IXIC gained 65.72 points, or 0.38%, to 17,150.02.

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% so far this week and tech stocks S5INFT have fallen over 4%.

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 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.

Tesla TSLA 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.

Nvidia NVDA edged up 0.7% after falling more than 11% in the previous two sessions. Other megacap stocks also rebounded. Amazon.com AMZN rose 2.5%, Apple AAPL added 1.3% and Alphabet GOOG gained 0.5%.

Frontier Communications FYBR shed 9.1% after Verizon VZ said it would buy the company in an all-cash deal worth $20 billion. Verizon shares were down 0.6%

JetBlue Airways JBLU jumped 8.6% after the carrier raised its third-quarter revenue forecast.