After showing a notable downward move over the course of the two previous sessions, stocks may see some further downside in early trading on Thursday. The major index futures are currently pointing to a lower open for the markets, with the Dow futures down by 36 points.
The recent pullback by the markets comes as traders finally seem to be cashing on the rally seen over the past several months, heeding the calls by a number of analysts that a correction is overdue.
Indications that the Federal Reserve is not likely to engage in another round of quantitative easing have also contributed to the downward momentum along with lingering concerns about the outlook for the global economy.
Selling pressure may be somewhat subdued, however, as the Labor Department recently released a report showing an unexpected drop in jobless claims in the week ended March 31st.
The report showed that jobless claims fell to 357,000 from the previous week's revised figure of 363,000. Economists had expected jobless claims to edge up to 360,000 from the 359,000 originally reported for the previous week.
With the unexpected decrease, jobless claims fell to their lowest level since coming in at 352,000 in the week ended April 19, 2008.
Nonetheless, traders are likely to be looking ahead to tomorrow's monthly employment report from the Labor Department, which is expected to show an increase of about 201,000 jobs in March.
Since the U.S. stock markets will be closed for Good Friday, some traders are likely to make bets on the strength of the report during trading today.
Among individual stocks, shares of Polycom (PLCM) are likely to come under pressure after the videoconferencing company lowered its first quarter revenue guidance. The company also forecast earnings below analyst estimates.
Bed Bath & Beyond (BBBY) is also likely to be in focus after the home furnishings retailer reported better than expected fourth quarter results. The company also forecast full year earnings growth in the high-single to low-double digit percentage levels.
Stocks saw considerable weakness during trading on Wednesday, extending the downward move seen in the previous session. The sell-off reflected continued disappointment with the minutes of the latest Federal Reserve meeting as well as lingering concerns about the global economy.
The major averages ended the session well off their worst levels of the day but still closed firmly in the red. The Dow fell 124.80 points or 1 percent to 13,074.75, the Nasdaq plunged 45.48 points or 1.5 percent to 3,068.09 and the S&P 500 dropped 14.42 points or 1 percent to 1,398.96.
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower on Thursday. Japan's Nikkei 225 Index fell by 0.5 percent, while Hong Kong's Hang Seng Index ended the day down by 1 percent.
The major European markets have also moved to the downside on the day. While the German DAX Index has fallen by 0.9 percent, the U.K.'s FTSE 100 Index and the French CAC 40 Index are both down by 0.4 percent.
In commodities trading, crude oil futures are edging up $0.11 to $101.58 a barrel after tumbling $2.54 to $101.47 a barrel on Wednesday. Gold futures are climbing $10.90 to $1,625 an ounce. In the previous session, the precious metal plunged $57.90 to $1,614.10 an ounce.
Among the currencies, the U.S. dollar is trading 82.13 yen compared to the 82.46 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.3056 compared to yesterday's $1.3142.
by RTT Staff Writer
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