US stocks close to an all-time high

The US stock market held close to its all-time high yesterday amid optimism that the economy is set to strengthen.

Traders working at the New York Stock Exchange, with shares edging higher amid optimism about the outlook for the US economy (AP)
Traders working at the New York Stock Exchange, with shares edging higher amid optimism about the outlook for the US economy (AP)

Stocks are on course for their best weekly gain in seven weeks after investors got more encouraging news on the economy.

A survey showed that US service firms increased their business more quickly last month as new orders rose.

Separate reports earlier in the week had shown manufacturing strengthening, hiring picking up, and sales of cars and trucks rising.

The news came ahead of the government's monthly jobs report, which will be published today.

Investors expect to see a strong pick-up in hiring. Economists are forecasting that the US economy added 200,000 jobs in March, according to FactSet. That would be the biggest gain in hiring since November.

"If you have a decent economy, a modestly growing economy, that's supportive of corporate earnings and stocks can continue to benefit from that," said John Fox, director of research at Fenimore Asset Management.

The Standard & Poor's 500 index fell 2.13 points, or 0.1%, to 1,888.77. The index closed at an all-time high of 1,890 a day earlier after rising for four straight days.

The Dow Jones industrial average fell 0.45 point, or less than 0.1%, to 16,572.55. The Nasdaq composite fell 38.72 points, or 0.9%, to 4,237.74.

Stocks started the day higher after getting a lift from a report on the US service sector, a broad category of businesses thank includes banks, transportation and construction.

The Institute for Supply Management's non-manufacturing index rose to 53.1 in March, up from 51.6 in February, indicating that growth in the service sector is picking up. The survey also showed hiring picking up.

However, by mid-morning stocks started to drift lower. Investors seemed unwilling to place big bets on the market before today's key jobs report.

"Going into the employment report, a lot of people aren't anxious to open new positions," said JJ Kinahan, chief strategist with TD Ameritrade.

"They don't want to be taken by surprise."

Barnes & Noble was among the day's big losers.

The stock fell 2.99 dollars, or 13.5%, to 19.12 dollars after Liberty Media said it was cutting its stake in the company.

Liberty Media, the investment company controlled by billionaire John Malone, gave Barnes & Noble a lifeline in 2011 when it bought a 17 percent stake in the company.

Biotechnology stocks also fell.

After surging at the start of the year, biotech stocks have become volatile amid concerns about the cost of the drugs that they are developing.

The S&P's index of biotechnology stocks fell 1.6%, paring its gains for the year to about 1.2%. The index had been up as much as 13% by the end of February.