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Stocks May Give Back Ground In Early Trading - U.S. Commentary

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After moving higher for four consecutive sessions, stocks may give back some 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 80 points.

While optimism about trade talks between the U.S. and China contributed to the recent strength on Wall Street, traders may cash in on the gains as assessments of the three-day meetings showed no significant breakthroughs.

A statement from the office of U.S. Trade Representative Robert Lighthizer said the meetings were held as part of an agreement between President Donald Trump and Chinese President Xi Jinping to engage in 90 days of negotiations with a view to achieving needed structural changes in China.

The statement said the talks included discussions on China's pledge to purchase a substantial amount of U.S. goods and services but did not provide details about the tone or outcome of the meetings.

"The United States officials conveyed President Trump's commitment to addressing our persistent trade deficit and to resolving structural issues in order to improve trade between our countries," the statement said.

The statement indicated the delegation led by Deputy U.S. Trade Representative Jeffrey Gerrish will now report back to receive guidance on the next steps.

Meanwhile, a statement from China's Commerce Ministry described the talks as "extensive, in-depth and detailed" and said the meetings "laid a foundation for the resolution of each others' concerns."

The comments do not dash hopes for a long-term trade deal between the U.S. and China, but traders were likely looking more concrete results.

On the U.S. economic front, the Labor Department released a report showing a bigger than expected drop in initial jobless claims in the week ended January 5th.

The report said initial jobless claims fell to 216,000, a decrease of 17,000 from the previous week's revised level of 233,000.

Economists had expected jobless claims to dip to 225,000 from the 231.000 originally reported for the previous week.

Later this afternoon, traders are likely to keep a close eye on remarks by Federal Reserve Chairman Jerome Powell at the Economic Club of Washington.

Stocks fluctuated over the course of the trading session on Wednesday but largely maintained a positive bias on the day. With the upward move, the major averages closed higher for the fourth consecutive session.

The major averages ended the day firmly in positive territory but off their highs of the session. The Dow climbed 91.67 points or 0.4 percent to 23,879.12, the Nasdaq advanced 60.08 points or 0.9 percent to 6,957.08 and the S&P 500 rose 10.55 points or 0.4 percent to 2,584.96.

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Thursday. Japan's Nikkei 225 Index slumped by 1.3 percent, while Hong Kong's Hang Seng Index edged up by 0.2 percent.

Meanwhile, the major European markets have also moved to the downside on the day. While the French CAC 40 Index has fallen by 0.5 percent, the German DAX Index and the U.K.'s FTSE 100 Index are down by 0.2 percent and 0.1 percent, respectively.

In commodities trading, crude oil futures are sliding $0.56 to $51.80 a barrel after spiking $2.58 to $52.36 a barrel on Wednesday. Meanwhile, an ounce of gold is trading at $1,292.30, up $0.30 compared to the previous session's close of $1,292. On Wednesday, gold climbed $6.10.

On the currency front, the U.S. dollar is unchanged compared to the 108.17 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.1522 compared to yesterday's $1.1543.

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