Stocks drop ahead of next jobs report

Wall Street remains up for the week on strength of 2-day rally

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

The S&P 500 fell 1 percent after having been up 0.4 percent in the early going. The benchmark index is up

4.4 percent for the week following its best two-day rally since the spring of 2020.

The selling was widespread, with roughly 80 percent of the stocks in the

S&P 500 ending in the red.

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 percent from 3.75 percent late Wednesday. The yield on the two-year Treasury, which more closely tracks expectations for Federal Reserve action, rose to 4.22 percent from 4.14 percent late Monday.

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

The labor market remains strong in the face of persistent inflation and a slowing overall U.S. economy.

That’s good for job hunters, but could give the Federal Reserve more reason to keep raising interest rates in its bid to crush inflation. Wall Street is eager for definitive signs that inflation is on the wane and the central bank can finally ease back on its rate hikes.

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 at 11,073.31. The Russell 2000 fell 10.18 points to 1,752.51.

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

Shares in cannabis companies surged following a late-afternoon announcement by the White House that President Biden is pardoning thousands of Americans convicted of “simple possession” of marijuana under federal law.

Biden also directed the secretary of Health and Human Services and the U.S. attorney general to review how marijuana is scheduled under federal law. It is currently classified as a Schedule I drug, alongside heroin and LSD. Rescheduling the drug would reduce or potentially eliminate criminal penalties for possession.