* U.S. factory sector contracts, jobless claims fall
* Nordstrom jumps after profit beat
* Boeing (NYSE:BA) rises; Reuters reports move to increase 737 MAX
production
* Dow rises 0.19%, S&P drops 0.05%, Nasdaq falls 0.36%
(Updates to market close)
By April Joyner
NEW YORK, Aug 22 (Reuters) - The benchmark S&P 500 ended
little changed on Thursday as a fall in U.S. jobless claims
offset data showing a contraction in U.S. manufacturing activity
while investors awaited Federal Reserve Chair Jerome Powell's
speech on Friday for clues on the central bank's monetary
policy.
Data from the U.S. Labor Department showed initial claims
for state unemployment benefits dropped more than expected last
week, suggesting the labor market was holding firm despite a
manufacturing slowdown and concerns the economy is on a path
toward recession. However, IHS Markit's Flash Purchasing Managers' Index
showed manufacturing activity contracting in August for the
first time in nearly a decade. The reading prompted concern
among some investors that economic weakness abroad and an
escalating trade war with China could drag down the U.S.
economy. Following the data release, the yield curve between
two-year and 10-year Treasury notes briefly inverted.
"The fact that manufacturing didn't just slow down but
contracted, that was a little surprising," said Oliver Pursche,
chief market strategist at Bruderman Asset Management in New
York.
Yet, Pursche said, "you had decent unemployment claims, they
were slightly better than expected, so that's a counter act.
That's why we don't expect there to be any kind of deep
recession."
For much of the session, the S&P 500 oscillated between
gains and losses. Several market strategists said investors were
pausing ahead of Fed Chair Powell's speech on Friday at an
annual gathering of central bankers in Jackson Hole, Wyoming,
which is expected to yield some clues on whether the Fed will
cut interest rates further.
The benchmark index dipped lower in intraday trade after
Philadelphia Fed President Patrick Harker and Kansas City Fed
President Esther George hinted at less dovish stances, saying
the U.S. economy does not need more stimulus at this point.
Those comments, coupled with the disappointing manufacturing
data and the brief yield curve inversion, would in other
circumstances be a "recipe for a sell-off," said Michael
Antonelli, market strategist at Robert W. Baird in Milwaukee.
But, he said, "it boils down to the fact that it's the eve
of a big event. The market wants to go into Jackson Hole on an
even keel."
The Dow Jones Industrial Average .DJI rose 49.51 points,
or 0.19%, to 26,252.24, the S&P 500 .SPX lost 1.48 points, or
0.05%, to 2,922.95 and the Nasdaq Composite .IXIC dropped
28.82 points, or 0.36%, to 7,991.39.
Shares of Nordstrom Inc (NYSE:JWN) JWN.N jumped 15.9%, the biggest
percentage gain on the S&P 500, after the department store's
quarterly profit beat estimates, joining Target Corp (NYSE:TGT) TGT.N and
Lowe's Cos Inc LOW.N in delivering upbeat retail numbers.
The Dow received a boost from Boeing Co BA.N shares, which
rose 4.2% as Reuters reported the planemaker is looking to
increase production of its grounded 737 MAX jets as early as
October, suggesting the aircraft's return to service may be on
track for the fourth quarter. Declining issues outnumbered advancing ones on the NYSE by a
1.16-to-1 ratio; on Nasdaq, a 1.54-to-1 ratio favored decliners.
The S&P 500 posted 40 new 52-week highs and five new lows;
the Nasdaq Composite recorded 61 new highs and 66 new lows.
Volume on U.S. exchanges was 5.65 billion shares, compared
to the 7.48 billion average for the full session over the last
20 trading days.