After turning in a lackluster performance in the previous session, stocks may continue to show a lack of direction in early trading on Thursday. The major index futures are currently pointing to a roughly flat open for the markets.
Uncertainty about the near-term outlook for the markets may keep some trades on the sidelines, leading to choppy trading on Wall Street.
Stocks have shown a notable recovery from the lows seen earlier this summer and are now at their best levels in three months. However, with the upward move partly due to optimism about further monetary stimulus, traders seem somewhat reluctant to continue buying stocks.
Meanwhile, some upbeat economic data may keep traders from cashing in on the recent gains, with a report from the Labor Department showing an unexpected drop in weekly jobless claims.
The report showed that initial jobless claims fell to 361,000 in the week ended August 4th from the previous week's revised figure of 367,000. Economists had expected jobless claims to edge up to 367,000 from the 365,000 originally reported for the previous week.
A separate report from the Commerce Department showed that the U.S. trade deficit narrowed to $42.9 billion in June from $48.0 billion in May. The trade deficit had been expected to narrow to $47.5 billion.
The narrower than expected trade deficit reflected an increase in the value of exports and a decrease in the value of imports.
On the earnings front, News Corp. (NWS: Quote) reported second quarter adjusted earnings that came in line with estimates, although its revenues were slightly below estimates.
After moving mostly higher over the course of the three previous sessions, stocks showed a lack of direction during trading on Wednesday. The major averages spent the day bouncing back and forth across the unchanged line.
The major averages eventually ended the session mixed, with the tech-heavy Nasdaq posting a modest loss. While the Nasdaq edged down by 4.61 points or 0.2 percent to 3,011.25, the Dow crept up 7.04 points or 0.1 percent to 13,175.64 and the S&P 500 inched up 0.87 points or 0.1 percent to 1,402.22.
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Thursday. Japan's Nikkei 225 Index advanced by 1.1 percent, while Hong Kong's Hang Seng Index surged up by 1 percent.
Meanwhile, the major European markets are seeing modest weakness on the day. While the German DAX Index has fallen by 0.7 percent, the French CAC 40 Index and the U.K.'s FTSE 100 Index are edging down by 0.2 percent and 0.1 percent, respectively.
In commodities trading, crude oil futures are climbing $0.54 to $93.89 a barrel after falling $0.32 to $93.35 a barrel on Wednesday. Gold futures, which rose $3.20 to $1,616 an ounce in the previous session, are slipping $0.10 to $1,615.90 an ounce.
On the currency front, the U.S. dollar is trading 78.57 yen compared to the 78.43 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.2308 compared to yesterday's $1.2365.
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by RTT Staff Writer
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