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Stocks May Move To The Downside In Early Trading - U.S. Commentary

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Stocks may see early weakness on Thursday after edging up to new record highs in the previous session. The major index futures are currently pointing to a lower open for the markets, with the Dow futures down by 34 points.

The futures saw further downside following the release of a report from the Labor Department showing a bigger than expected increase in consumer prices in the month of August.

The Labor Department said its consumer price index climbed by 0.4 percent in August after inching up by 0.1 percent in July. Economists had expected consumer prices to rise by 0.3 percent.

Excluding food and energy prices, the core consumer price index rose by 0.2 percent in August following a 0.1 percent uptick in the previous month. The increase in core prices matched economist estimates.

The annual rate of growth in consumer prices accelerated to 1.9 percent in August from 1.7 percent in July, although the annual growth in core consumer was prices was unchanged at 1.7 percent.

A separate report from the Labor Department showed an unexpected pullback in initial jobless claims in the week ended September 9th.

The report said initial jobless claims fell to 284,000, a decrease of 14,000 from the previous week's unrevised level of 298,000. The drop surprised economists, who had expected jobless claims to inch up to 300,000.

Geopolitical concerns may weigh on the markets after North Korea threatened to use nuclear weapons to "sink" Japan and reduce the U.S. to "ashes and darkness" for supporting a new round of sanctions by the United Nations.

Traders are also digesting the latest monetary policy announcement by the Bank of England, which held interest rates steady but said some withdrawal of monetary stimulus is likely to be appropriate over the coming months.

After moving higher over the two previous sessions, stocks showed a lack of direction throughout the trading day on Wednesday. The major averages spent the day bouncing back and forth across the unchanged line.

The major averages eventually ended the session modestly higher, reaching new record closing highs. The Dow rose 39.32 points or 0.2 percent to 22,158.18, the Nasdaq inched up 5.91 points or 0.1 percent to 6,460.19 and the S&P 500 edged up 1.89 points or 0.1 percent to 2,498.37.

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Thursday. Japan's Nikkei 225 Index dipped by 0.3 percent, while Hong Kong's Hang Seng Index fell by 0.4 percent.

Meanwhile, the major European markets have turned mixed on the day. While the French CAC 40 Index has inched up by 0.1 percent, the German DAX Index is down by 0.2 percent and the U.K.'s FTSE 100 Index is down by 0.9 percent.

In commodities trading, crude oil futures are climbing $0.48 to $49.78 a barrel after jumping $1.07 to $49.30 a barrel on Wednesday. An ounce of gold is trading at $1,323.60, down $4.40 compared to the previous session's close of $1,328. On Wednesday, gold slid $4.70.

On the currency front, the U.S. dollar is trading at 110.52 yen compared to the 110.55 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.1886 compared to yesterday's $1.1885.

by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

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