By Sinead Carew
(Reuters) - The S&P 500 and the Nasdaq closed slightly higher on Thursday in a choppy start to the fourth quarter as investors waited for the monthly U.S. jobs report and the quarterly earnings season.
After starting with a brief rally, stocks fell before edging up again after the latest in a spate of volatile trading days for an equities market where rallies quickly evaporate amid uncertainty about the global economy and U.S. interest rates.
Many investors were holding fire ahead of Friday's crucial U.S. non-farm payrolls data and the third-quarter earnings season which starts with Alcoa Inc's (N:AA) report on Oct. 8.
"We're going to get a number investors can sink their teeth into tomorrow and next week kicks off earnings season which is vitally important to the direction of stocks for the rest of the year," said Jack Ablin, chief investment officer at BMO Private Bank in Chicago.
The jobs number should give investors reassurance about the U.S. economy and clues as to whether the Federal Reserve will raise U.S. interest rates this month, according to Ablin.
"The Fed is fixated on jobs and its ability to throttle inflation. Meanwhile unless we get a lousy jobs number tomorrow I think the Fed is going to be on the hook to explain themselves if they're not going to raise," he said.
Data on Thursday showed that the pace of growth at U.S. factories slowed in September, but new jobless claims pointed to a tightening labor market.
Earlier in the day, data from China showed factory activity fell again, but not as much as feared.
The market has been jittery about signs of slowing global economic growth, especially in China.
The Dow Jones industrial average (DJI) fell 12.69 points, or 0.08 percent, to 16,272.01, the S&P 500 (SPX) gained 3.79 points, or 0.2 percent, to 1,923.82 and the Nasdaq Composite (IXIC) added 6.92 points, or 0.15 percent, to 4,627.08.
Half of the S&P's 10 industry sectors closed higher led by a 1 percent rise for materials <.SPLRCM> and a 0.9 percent rise for healthcare <.SPXHC>. Both sectors had their third straight day of gains after a recent bout of selling.
The utilities index's <.SPLRCU> fell 1.2 percent after rising 2.6 percent in September when nervous investors preferred more defensive sectors in a shaky market.
Oil prices (CLc1) (LCOc1) settled lower on Thursday after altered weather forecasts snuffed out an early rally. Fears a hurricane could damage U.S. East Coast oil installations had lifted energy stocks earlier in the day.
Shares of Twitter (N:TWTR) fell 8.4 percent to $24.68, after a report that co-founder and interim Chief Executive Jack Dorsey was expected to be named permanent CEO.
Dunkin Brands (O:DNKN) fell 12.2 percent to $43.00 after it gave a weak full-year forecast and said it would shut 100 stores.
Declining issues outnumbered advancing ones on the NYSE by 1,733 to 1,262, for a 1.37-to-1 ratio on the downside; on the Nasdaq, 1,774 issues fell and 952 advanced for a 1.86-to-1 ratio favoring decliners.
The S&P 500 posted four new 52-week highs and 27 lows; the Nasdaq recorded 13 new highs and 169 lows.
More than 7.54 billion shares changed hands on U.S. exchanges, slightly ahead of the 7.25 billion average for the previous 20 sessions, according to Thomson Reuters data.