At Friday's closing bell, all three major U.S. stock indexes had booked strong gains for September. The Dow Jones industrial average (.DJI: Quote, Profile, Research) climbed 4.0 percent for the month, while the Standard & Poor's 500 Index (.SPX: Quote, Profile, Research) advanced 3.6 percent and the Nasdaq Composite Index (.IXIC: Quote, Profile, Research) rose 4.1 percent. It was the best September for the S&P since 1998.
On Friday, the September payroll data is due. In a Reuters poll of economists, the median forecast has 94,000 jobs being added to non-farm payrolls, and the jobless rate rising to 4.7 percent from 4.6 percent.
In contrast, August non-farm payrolls shrank by 4,000 jobs, a surprise that undoubtedly persuaded the Fed to cut interest rates by one-half percentage point on September 18.
"The payroll report is the major thing that a lot of investors are going to focus on, particularly since the August number was so far below expectations," said Brandon Thomas, chief investment officer of Portfolio Management Consultants, a unit of Envestnet Asset Management, in Chicago.
Thomas noted that recent declines in weekly jobless claims may be signaling a healthy jobs report for September. He expects 115,000 new jobs and a jobless rate unchanged at 4.6 percent.
"If the numbers are too strong, the Fed may take a 'wait-and-see' attitude," Thomas said. That would disappoint those hoping for another rate cut at the October 30-31 policy meeting.