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Stocks May Move Modestly Lower In Early Trading - U.S. Commentary


After moving modestly lower over the course of the previous session, stocks could see some further downside in early trading on Thursday. The major index futures are currently pointing to a modestly lower open for the markets, with the Dow futures down by 12 points.

A bigger than expected rebound by weekly jobless claims may weigh on investor sentiment ahead of the release of the closely watched monthly employment report on Friday.

The Labor Department said initial jobless claims rose to 368,000 in the week ended January 26th, an increase of 38,000 from the previous week's unrevised figure of 330,000. Economists had been expecting jobless claims to climb to 350,000.

Jobless claims bounced well off the five-year low set in the previous week but did not completely offset the recent decreases.

A separate report from the Commerce Department showed a substantial increase in personal income in the month of December.

The Commerce Department said personal income surged up by 2.6 percent in December following an upwardly revised 1.0 percent increase in November. Economists had expected income to climb by 0.7 percent compared to the 0.6 percent growth originally reported for the previous month.

The report also showed that personal spending edged up by 0.2 percent in December after rising by 0.4 percent in November. Spending had been expected to increase by about 0.3 percent.

Shortly after the start of trading, the Institute for Supply Management - Chicago is also scheduled to release its report on Chicago-area business activity in the month of January.

Nonetheless, trading activity may remain somewhat subdued ahead of Friday's monthly jobs report, which is expected to show an increase of about 180,000 jobs.

Among individual stocks, shares of Facebook (FB) are under pressure in pre-market trading after the social media giant reported sharply lower fourth quarter earnings.

After showing a lack of direction throughout much of the trading day on Wednesday, stocks moved modestly lower in the latter part of the session following the Federal Reserve's latest monetary policy announcement.

The major averages climbed off their lows going into the close but still ended the day in the red. The Dow fell 44.00 points or 0.3 percent to 13,910.42, the Nasdaq dipped 11.35 points or 0.4 percent to 3,142.31 and the S&P 500 slid 5.88 points or 0.4 percent to 1,501.96.

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Thursday. Japan's Nikkei 225 Index edged up by 0.2 percent, while Hong Kong's Hang Seng Index fell by 0.4 percent.

Meanwhile, the major European markets have all moved to the downside on the day. While the French CAC 40 Index has fallen by 0.8 percent, the U.K.'s FTSE 100 Index and the German DAX Index are both down by 0.5 percent.

In commodities trading, crude oil futures are sliding $0.38 to $97.56 a barrel after climbing $0.37 to $97.94 a barrel on Thursday. Gold futures, which rose $18.90 to $1,681.60 an ounce in the previous session, are sliding $9.30 to $1,672.30 an ounce.

On the currency front, the U.S. dollar is trading at 90.94 yen compared to the 91.09 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is trading at $1.3552 compared to yesterday's $1.3568.

by RTTNews Staff Writer

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