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Stocks May Open Roughly Flat After Yesterday's Sell-Off - U.S. Commentary

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Following the sell-off seen in the previous session, stocks may show a lack of direction in early trading on Thursday. The major index futures have climbed well off their worst levels and are currently pointing to a roughly flat open for the markets.

The futures were pointing to a sharply lower open earlier in the day but rebounded as treasury yields tumbled following the release of the Labor Department's report on consumer prices in the month of September.

The Labor Department said its consumer price index inched up by 0.1 percent in September after rising by 0.2 percent in August. Economists had expected prices to increase by another 0.2 percent.

Excluding food and energy prices, core consumer prices also crept up by 0.1 percent in September, matching the uptick seen in the previous month. Core prices had been expected to rise by 0.2 percent.

The report also said the annual rate of consumer price growth slowed to 2.3 percent in September from 2.7 percent in August, while the annual rate of core consumer price growth was unchanged at 2.2 percent.

A separate report released by the Labor Department unexpectedly showed a modest increase in first-time claims for U.S. unemployment benefits in the week ended October 6th.

The report said initial jobless claims rose to 214,000, an increase of 7,000 from the previous week's unrevised level of 207,000. Economists had expected jobless claims to edge down to 206,000.

Treasury yields have moved notably lower following the release of the data, with the yield on the benchmark ten-year note sliding by 5.6 basis points to 3.169 percent.

The pullback by treasury yields may offset some of the recent concerns about the outlook for interest rates that contributed to the sell-off on Wednesday.

Stocks saw substantial weakness during trading on Wednesday following the mixed performances seen in the two previous sessions. The tech-heavy Nasdaq showed a particularly steep drop, falling to its lowest closing level in over three months.

The major averages saw further downside going into the close, ending the day just off their lows of the session. The Dow plunged 831.83 points or 3.2 percent to 25,598.74, the Nasdaq plummeted 315.97 points or 4.1 percent to 7,422.05 and the S&P 500 tumbled 94.66 points or 3.3 percent to 2,785.68.

In overseas trading, stock markets across the Asia-Pacific moved sharply lower on Thursday following the overnight sell-off on Wall Street. Japan's Nikkei 225 Index dove by 3.9 percent, while Hong Kong's Hang Seng Index slumped by 3.5 percent.

The major European markets have also moved to the downside on the day. While the German DAX Index is down by 0.6 percent, the French CAC 40 Index and the U.K.'s FTSE 100 Index are down by 1.1 percent and 1.2 percent, respectively.

In commodities trading, crude oil futures are sliding $0.87 to $72.30 a barrel after plunging $1.79 to $73.17 a barrel on Wednesday. Meanwhile, an ounce of gold is trading at $1,212.80, up $19.40 compared to the previous session's close of $1,193.40. On Wednesday, gold rose $1.90.

On the currency front, the U.S. dollar is trading at 112.21 yen compared to the 112.27 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.1585 compared to yesterday's $1.1520.

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