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Stocks May Give Back Ground After Yesterday's Rally - U.S. Commentary

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Following the rally seen in the previous session, stocks may give back ground in early trading on Thursday. The major index futures are currently pointing to a lower open for the markets, with the Dow futures down by 75 points.

Profit taking may contribute to initial weakness on Wall Street after the strong gains posted in the previous session lifted the Dow and the S&P 500 to their best closing levels in nearly a month.

Traders may also look to move money into safe havens ahead of the Federal Reserve's monetary policy announcement this afternoon.

The Fed is widely expected to leave interest rates unchanged, but the accompanying statement may shed additional light on the anticipated rate hike in December.

CME Group's FedWatch tool indicates only a 7 percent chance the Fed will raise rates today but a 75 percent chance for a 25 basis point increase in rates next month.

On the U.S. economic front, the Labor Department released a report showing a slight decrease in initial jobless claims in the week ended November 3rd.

The report said initial jobless claims edged down to 214,000, a decrease of 1,000 from the previous week's revised level of 215,000.

Economists had expected jobless claims to dip to 213,000 from the 214,000 originally reported for the previous week.

Stocks showed a significant move to the upside during trading on Wednesday, adding to the gains posted in the previous session. With the continued upward move, the Dow and the S&P 500 reached their best closing levels in nearly a month.

The major averages ended the day just off their highs of the session. The Dow surged up 545.29 points or 2.1 percent to 26,180.30, the Nasdaq soared 194.79 points or 2.6 percent to 7,570.75 and the S&P 500 spiked 58.44 points or 2.1 percent to 2,813.89.

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Thursday. Japan's Nikkei 225 Index jumped by 1.8 percent, while Hong Kong's Hang Seng Index rose by 0.3 percent.

Meanwhile, the major European markets are turning in a mixed performance on the day. While the U.K.'s FTSE 100 Index has risen by 0.4 percent, the French CAC 40 Index is just below the unchanged line and the German DAX Index is down by 0.1 percent.

In commodities trading, crude oil futures are slipping $0.08 to $61.59 a barrel after sliding $0.54 to $61.67 a barrel on Wednesday. Meanwhile, an ounce of gold is trading at $1,222.90, down $5.80 compared to the previous session's close of $1,228.70. On Wednesday, gold rose $2.40.

On the currency front, the U.S. dollar is trading at 113.70 yen compared to the 113.52 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.1424 compared to yesterday's $1.1426.

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