U.S. Stocks May Give Back Ground Following Recent Strength
After moving sharply higher over the past several sessions, stocks may move back to the downside in early trading on Thursday. The major index futures are currently pointing to a slightly lower open for the markets, with the S&P 500 futures down by 0.1 percent.
A negative reaction to earnings news from Walmart (WMT) may weigh on the markets, with the retail giant plunging by 6.1 percent in pre-market trading.
Walmart reported better than expected fiscal third quarter results but forecast full-year earnings toward the low end of analyst estimates.
Networking giant Cisco Systems (CSCO) is also seeing substantial pre-market weakness after reporting fiscal first quarter results that beat estimates but cutting its full-year revenue forecast.
However, the futures regained some ground following the release of the latest batch of U.S. economic data, including a Labor Department report showing jobless claims climbed by much more than expected in the week ended November 11th.
The Labor Department said initial jobless claims rose to 231,000, an increase of 13,000 from the previous week’s revised level of 218,000.
Economists had expected jobless claims to inch up to 220,000 from the 217,000 originally reported for the previous week.
A separate report from the Labor Department showing U.S. import and export prices both fell by more than expected in the month of October may also add to recent optimism about inflation and the outlook for interest rates.
The report said import prices slid by 0.8 percent in October after climbing by an upwardly revised 0.4 percent in September.
Economists had expected import prices to decrease by 0.3 percent compared to the 0.1 percent uptick originally reported for the previous month.
Meanwhile, the Labor Department said export prices slumped by 1.1 percent in October after rising by a downwardly revised 0.5 percent in September.
Export prices were expected to decline by 0.5 percent compared to the 0.7 percent increase originally reported for the previous month.
Just before the start of trading, the Federal Reserve is scheduled to release its report on industrial production in the month of October. Economists expect industrial production to decrease by 0.3 percent in October after rising by 0.3 percent in September.
The National Association of Home Builders is scheduled to release its report on homebuilder confidence in the month of November not long after the open. The housing market index is expected to come in unchanged in November after falling to 40 in October.
Following the substantial rally seen in Tuesday’s session, stocks saw some further upside during trading on Wednesday. The major averages fluctuated over the course of the session but managed to end the day modestly higher.
The Nasdaq inched up 9.45 points or 0.1 percent to a three-month closing high of 14,103.84, and the S&P 500 edged up 7.18 points or 0.2 percent to a two-month closing high of 4.502.88.
The narrower Dow outperformed, climbing 163.51 points or 0.5 percent to 3,499.21, the blue chip index’s best closing level in three months.
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Thursday. Japan’s Nikkei 225 Index fell by 0.3 percent, while Hong Kong’s Hang Seng Index tumbled by 1.4 percent.
Meanwhile, the major European markets are turning in a mixed performance on the day. While the German DAX Index is up by 0.5 percent, the French CAC 40 Index is down by 0.3 percent and the U.K.’s FTSE 100 Index is down by 0.5 percent.
In commodities trading, crude oil futures are slipping $0.24 to $76.42 a barrel after slumping $1.60 to $76.66 a barrel on Wednesday. Meanwhile, after edging down $2.20 to $1,964.30 an ounce in the previous session, gold futures are climbing $9.80 to $1,974.10 an ounce.
On the currency front, the U.S. dollar is trading at 150.82 yen versus the 151.36 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.0873 compared to yesterday’s $1.0848.
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