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Stock Market Today: Dow edges lower as investors seek ‘clearer read’ on labor market from Friday jobs report

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Stock Market Today: Dow edges lower as investors seek ‘clearer read’ on labor market from Friday jobs report

The stronger-than-expected August ISM Services Index reading appeared to give the stock market a modest and perhaps temporary lift, with the data indicating a back-to-back monthly expansion in the largest segment of the U.S. economy.

“This latest data point suggests that services sector output is far from crashing. There is no recession signal in this result,” said economists Carl Weinberg and Rubeela Farooqi of High Frequency Economics in a note.

The main event for policymakers and market participants, however, remains Friday’s nonfarm payrolls reading.

Stephen Brown, deputy chief North America economist at Capital Economics said that, in short, “there was nothing in the ISM services report to sway the Fed’s decision about whether to kick off its loosening cycle with a 25bp (basis point) or 50bp cut, which remains dependent on the August Employment Report tomorrow.”

While ADP Thursday morning reported a weaker-than-expected rise of 99,000 private-sector August payrolls, Brown noted that the data series has little correlation with the official jobs numbers. Capital Economics continues to look for nonfarm payrolls to show a rise of 170,000, with the unemployment rate ticking down to 4.2% from 4.3%.

Economists surveyed by the Wall Street Journal look for August nonfarm payrolls to rise by 161,000 and see the unemployment rate at 4.2%.

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