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Stocks May See Early Weakness On Disappointing Jobs Data - U.S. Commentary

After turning in a strong performance in the previous session, stocks are likely to move back to the downside in early trading on Thursday. The major index futures are currently pointing to a moderately lower open, with the Dow futures down by 33 points.

Disappointing jobs data is likely to contribute to any early weakness on Wall Street, with a report from the Labor Department showing a much smaller than expected drop in initial jobless claims in the week ended April 21st.

The report showed that jobless claims edged down to 388,000 from the previous week's revised figure of 389,000. Economists had been expecting jobless claims to fall to 375,000 from the 386,000 originally reported for the previous week.

Peter Boockvar, managing director at Miller Tabak, said, "Bottom line, the 1st week above 380,000 we were able to cite Good Friday as a reason in distorting the seasonals. The 2nd week in a row above 380,000 we said it bears watching."

"Now the 3rd week in a row above 380,000 and it's more clear that the downward trend in firing's has stopped for now," he added.

Not long after the start of trading, the National Association of Realtors is expected to release its report on pending home sales in the month of March. Economists expect pending sales to increase by about 1.0 percent in March following a 0.5 percent drop in February.

Among individual stocks, shares of Exxon Mobil (XOM) may come under pressure after the oil giant reported first quarter earnings that fell by more than analysts had anticipated. Meanwhile, the company also announced a 21 percent increase in its second quarter dividend.

UPS (UPS) could also see early weakness after the delivery giant reported first quarter earnings that rose year-over-year but came in below analyst estimates.

On the other hand, shares of Xilinx (XLNX) are likely to move to the upside after the programmable computer chip maker reported better than expected fourth quarter results and provided upbeat first quarter revenue guidance.

With traders reacting positively to better than expected quarterly results from tech giant Apple (AAPL), stocks saw significant strength during trading on Wednesday. The markets continued to perform well following the Federal Reserve's monetary policy announcement.

After moving sharply higher in early trading, the major averages hovered firmly in positive territory throughout the day. The Dow rose 89.16 points or 0.7 percent to 13,090.72, the Nasdaq surged up 68.03 points or 2.3 percent to 3,029.63 and the S&P 500 climbed 18.72 points or 1.4 percent to 1,390.69.

In overseas trading, stock markets across the Asia-Pacific region closed modestly higher on Thursday. Japan's Nikkei 225 Index closed just above the unchanged line, while Australia's All Ordinaries Index crept up by 0.3 percent. Hong Kong's Hang Seng Index advanced by a more notable 0.8 percent.

Meanwhile, the major European markets have all moved to the downside on the day. The U.K.'s FTSE 100 Index is down by 0.2 percent, the German DAX Index is down by 0.6 percent, and the French CAC 40 Index is down by 1.1 percent.

In commodities trading, crude oil futures are slipping $0.19 to $103.93 a barrel after climbing $0.57 to $104.12 a barrel on Wednesday. Gold futures, which fell $1.50 to $1,642.30 an ounce in the previous session, are rising $12.30 to $1,654.60 an ounce.

On the currency front, the U.S. dollar is trading at 80.75 yen compared to the 81.34 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.3212 compared to yesterday's $1.3217.

by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

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