The Dow Jones industrial average lost 4.15 points, or less than 0.1 percent, to 17,863.43. The Standard & Poor’s 500 index fell 2.38 points, or 0.1 percent, to 2,099.93 and the Nasdaq composite fell 14.74 points, or 0.3 percent, to 5,127.74.
Drug stocks were among the biggest decliners, following another steep drop in shares of Valeant Pharmaceuticals. Shares in the company, which traded above $250 a share only a few months ago, fell below $80 on reports that a major hedge fund had sold its investment in the company and a Congressional panel is probing the company’s operations. Valeant closed down $13.20, or 14 percent, to $78.77.
While the government’s monthly jobs report is always important to investors, there is additional focus on this month’s report. With the fate of years of near-zero interest rates hanging in the balance, strong October and November jobs reports could give the Federal Reserve enough of a reason to consider raising interest rates in December.
“We think the Fed does raise interest rates in December, but it is going to be somewhat of a close call and it depends on how the data comes in between now and then,” said David Lefkowitz, senior equity strategist for UBS wealth management.
Testifying before a committee of the U.S. Congress on Wednesday, Federal Reserve Chair Janet Yellen described the U.S. economy as “performing well” and said an interest rate hike in December was a “live possibility” if the economy stays on track. Her view was echoed by another Fed policymaker later in the day. Yellen did stress that no decision has been made yet and a move in December will depend on how the economy fares between now and then.
Economists expect that U.S. employers added 190,000 jobs last month and that the unemployment rate remained steady at 5.1 percent, according to FactSet.
Investors have become increasingly confident that there’s a real chance of a December rate hike. Investments that track which way the Fed will move interest rates show the possibility of a rate hike at around 60 percent. Bond yields remained unchanged, with the benchmark 10-year U.S. Treasury note at 2.23 percent. Bond yields are at their highest level since right before the Fed’s September meeting.
In the energy markets, U.S. crude oil fell $1.12, or 2.4 percent, to $45.20 a barrel in electronic trading in New York. Brent crude, which is used to price international oils, fell 60 cents, or 1.2 percent, to $47.98 a barrel.
Wholesale gasoline futures fell two cents, or 1 percent, to $1.487 a gallon, heating oil fell three cents, or 2 percent, to $1.361 a gallon and natural gas futures rose 10 cents, or 4.5 percent, to $2.364 per 1,000 cubic feet.
The jump in natural gas prices helped push gas companies sharply higher. Southwestern Energy rose 62 cents, or 5.3 percent, to $12.28 and CONSOL Energy rose 33 cents, or 4 percent to $8.45.
In metals, gold fell $2.00, or 0.2 percent, $1,104.20 an ounce, silver fell eight cents, or 0.5 percent, to $14.98 an ounce and copper fell 7 cents, or 3 percent, to $2.255 a pound.