Stocks may move to the downside in early trading on Thursday, giving back some ground following the strong upward move seen in the previous session. The major index futures are currently pointing to a modestly lower open for the markets, with the Dow futures down by 68 points.
Profit taking may contribute to initial weakness on Wall Street, as traders cash in on the strong gains posted on Monday and Wednesday.
The advance seen in the previous session lifted the Nasdaq to a three-month closing high, while the S&P 500 reached its best closing level since early March.
The tech-heavy Nasdaq has shown a particularly strong recovery from its March lows and is currently less than 5 percent below the record high set in February.
However, the futures have regained ground in recent trading following the release of a report from the Labor Department showing a continued decrease in first-time claims for U.S. unemployment benefits.
The report said initial jobless claims dropped to 2.438 million in the week ended May 16th, a decrease of 249,000 from the previous week’s revised level of 2.687 million.
Economists had expected jobless claims to tumble to 2.400 million from the 2.981 million originally reported for the previous week.
Jobless claims fell for the seventh straight week after reaching a record high of 6.867 million in the week ended March 28th.
A separate report released by the Federal Reserve Bank of Philadelphia showed a slowdown in the pace of contraction in regional manufacturing activity in the month of May.
The Philly Fed said its diffusion index for current general activity climbed to a negative 43.1 in May from a negative 56.6 in April. Economists had expected the index to increase to a negative 41.5.
The index rebounded from the nearly 40-year low set in the previous month, but a negative reading still indicates a contraction in regional manufacturing activity.
Not long after the start of trading, the National Association of Realtors is scheduled to release its report on existing home sales in the month of April. Existing home sales are expected to plunge by 18.9 percent.
The Conference Board is also due to release its report on leading economic indicators in the month of April. The leading economic index is expected to tumbled by 5.9 percent.
Following the sharp pullback seen late in Tuesday’s session, stocks showed a strong move back to the upside during trading on Wednesday. With the upward move, the tech-heavy Nasdaq ended the session at its best closing level in three months.
The major averages finished the session off their best levels of the day but still sharply higher. The jumped 369.04 points or 1.5 percent to 24,575.90, the Nasdaq spiked 190.67 points or 2.1 percent to 9,375.78 and the S&P 500 surged up 48.67 points or 1.7 percent to 2,971.61.
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Thursday. Japan’s Nikkei 225 Index dipped by 0.3 percent, while China’s Shanghai Composite Index fell by 0.6 percent.
The major European markets have also moved to the downside on the day. While the German DAX Index has slumped by 1.2 percent, the French CAC 40 Index is down by 0.8 percent and the U.K.’s FTSE 100 Index is down by 0.4 percent.
In commodities trading, crude oil futures are jumping $1.03 to $34.52 a barrel after surging up $1.53 to $33.49 a barrel on Wednesday. Meanwhile, after rising $6.50 to $1,752.10 an ounce in the previous session, gold futures are sliding $11.90 to $1,740.20 an ounce.
On the currency front, the U.S. dollar is trading at 107.66 yen versus the 107.53 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.1004 compared to yesterday’s $1.0980.
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