US open: Stocks fall as investors cautious ahead of non-farms report

US stocks fell on Thursday as investors erred on the side of caution before the release of Friday’s non-farm payrolls report.

The Dow Jones Industrial Average dipped 0.15%, the Nasdaq lost 0.09% and the S&P 500 shed 0.17% at 1436 GMT.

Ahead of the all-important non-farms report, the Labor Department revealed the number of first time unemployment benefits claimants in the US unexpectedly rose last week. Initial jobless claims rose by 6,000 to 278,000, versus economists’ expectations for a drop to 271,000. The previous week’s figures were unrevised.

Pantheon Macroeconomics said: "After three straight downside surprises, claims have nudged a bit above the underlying trend, which probably is in the mid-270s. At that level, and coupled with robust indicators of the pace of hiring, we'd expect payroll growth to run close to the 2015 average, 228k.

"That said, we expect only 180k tomorrow, thanks to a combination of a correction in the construction sector after the Q4 weather boost, and a tendency for the February number initially to be understated and then revised higher."

Analysts expect the non-farm payrolls report to show US employers added 193,000 jobs in February, compared to 151,000 a month earlier. The unemployment rate is forecast to hold at 4.9% while average hourly earnings are projected to rise 0.2% month-on-month in February, slowing from the previous month’s 0.5% increase.

The Federal Reserve is taking the strength of the labour market into consideration as it determines the timing of its next change in interest rates.

On Thursday’s economic calendar, Markit's purchasing managers' index on the US services industry fell to 49.7 in February, down from 52.3 in January and worse than the 50 reading expected by analysts. It was below the 'flash' estimate of 49.8 and under the 50 mark that separates contraction from expansion for the first time in almost two and half years.

Still to come, ISM releases its on US non-manufacturing PMI at 1500 GMT and US factory orders figures are due at the same time.

Meanwhile, oil prices took another nose dive after government data on Wednesday showed US crude inventories rose 10.4 million barrels to a record of 517.98 million barrels last week. West Texas Intermediate crude fell 0.78% to $34.39 per barrel and Brent decreased 0.79% to $36.64 per barrel at 1433 GMT.

In corporate news, Herbalife shares tumbled after the marketing and nutrition firm said it had released “errant” information regarding new members.

Warehouse chain Costco Wholesale Corp. was lower after it posted weaker-than-expected second quarter profit and revenue.

Chesapeake Energy Corp.’s shares recovered after the company’s former chief executive died on Wednesday in a car accident. He had been charged a day earlier with breaking federal antitrust laws on claims he had conspired with an unnamed company to keep land-lease rights in Oklahoma low between 2007 and 2012.

On the upside, Intel rallied after RW Baird upgraded the stock to ‘outperform’ from ‘neutral’.

Joy Global surged after reporting a worse-than-anticipated loss for its first quarter.

In currencies, the dollar fell 0.11% versus the pound, dropped 0.35% against the euro and grew 0.26% versus the yen.