With traders expressing concerns about the outlook for the global economy, stocks are likely to move to the downside in early trading on Thursday. The major index futures are currently pointing to a lower open, with the Dow futures down by 54 points.
The downward momentum for the markets is largely due to the release of some disappointing data from overseas, including a report showing a continued contraction in Chinese manufacturing activity.
A report from HSBC showed that its index of activity in the Chinese manufacturing sector fell to 48.1 in March from 49.6 in February, with a reading below 50 indicating a contraction. With the drop, the index suggested that Chinese factory activity shrank for the fifth consecutive month.
Adding to the negative sentiment, a report from Markit Economics indicated that Eurozone private sector activity fell more sharply than expected in March.
Markit Economics said that its composite output index for the Eurozone fell to a three-month low of 48.7 in March from 49.3 in February.
The disappointing overseas data has overshadowed a report from the Labor Department showing that U.S. initial jobless claims fell to a four-year low in the week ended March 17th,
The report showed that initial jobless claims fell to 348,000 from the previous week's revised figure of 353,000. The drop surprised economists, who had expected jobless claims to edge up to 352,000 from the 351,000 originally reported for the previous week.
With the unexpected decrease, jobless claims fell to their lowest level since coming in at 347,000 in the week ended March 8, 2008.
Stocks showed a lack of direction throughout the trading day on Wednesday, as traders seemed reluctant to make any significant moves. The choppy trading came after stocks ended the previous session mostly lower but well off their worst levels.
The major averages ended the session mixed, with the Nasdaq closing just above the unchanged line. The Nasdaq inched up 1.17 points or less than a tenth of a percent to 3,075.32, while the Dow fell 45.57 points or 0.4 percent to 13,124.62 and the S&P 500 slipped 2.63 points or 0.2 percent to 1,402.89.
In overseas trading, stock markets across the Asia-Pacific region turned in a lackluster performance on Thursday, ending the day mixed. Japan's Nikkei 225 Index rose by 0.4 percent, while China's Shanghai Composite Index edged down by 0.1 percent.
Meanwhile, the major European markets have all shown notable moves to the downside on the day. While the U.K.'s FTSE 100 Index is down by 0.7 percent, the German DAX Index and the French CAC 40 Index have fallen by 1.3 percent and 1.4 percent, respectively.
In commodities trading, crude oil futures are sliding $1.03 to 4106.24 a barrel after climbing $1.20 to $107.27 a barrel on Wednesday. Gold futures are falling $11.60 to $1,638.70 an ounce. In the previous session, the precious metal rose $3.30 to $1,650.30 an ounce.
Among currencies, the U.S. dollar is trading at 83.15 yen compared to the 83.42 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.3173 compared to yesterday's $1.3216.
by RTT Staff Writer
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