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Stocks May Experience Subdued Buying Interest - U.S. Commentary


After ending a lackluster session mostly higher on Wednesday, stocks may initially show a lack of direction once again on Thursday. The major index futures are currently pointing to a slightly higher open, with the Dow futures up by 27 points.

Continued optimism about a U.S.-China trade deal may generate some buying interest, although traders are also digesting a report from the Labor Department showing a much bigger than expected increase in producer prices.

The Labor Department said is producer price index for final demand climbed by 0.6 percent in March after inching up by 0.1 percent in February. Economists had expected prices to rise by 0.3 percent.

Core producer prices, which exclude food and energy prices, also rose by 0.3 percent in March following a 0.1 percent uptick in February. Core prices had been expected to edge up by 0.2 percent.

While the bigger than expected increase in producer prices was largely driven by energy prices, the data may still raise concerns about the outlook for inflation.

Meanwhile, a separate Labor Department showed first-time claims for U.S. unemployment benefits once again slid to their lowest level in nearly 50 years in the week ended April 6th

The report said initial jobless claims fell to 196,000, a decrease of 8,000 from the previous week's revised level of 204,000.

The continued drop surprised economists, who had expected jobless claims to rise to 211,000 from the 202,000 originally reported for the previous week.

With the unexpected decrease, initial jobless claims fell to their lowest level since hitting 193,000 in October of 1969.

While buying interest was somewhat subdued, stocks moved mostly higher over the course of the trading day on Wednesday. With the upward move, the tech-heavy Nasdaq ended the session at its best closing level in over six months.

The Dow bounced back and forth across the unchanged line before closing up 6.58 points or less than a tenth of a percent at 26,157.16. The Nasdaq climbed 54.97 points or 0.7 percent to 7,964.24 and the S&P 500 rose 10.01 points or 0.4 percent to 2,888.21.

In overseas trading stock markets across the Asia-Pacific region moved mostly lower on Thursday, although Japan's Nikkei 225 Index bucked the downtrend and inched up by 0.1 percent. China's Shanghai Composite Index plunged by 1.6 percent, while Hong Kong's Hang Seng Index slumped by 0.9 percent.

Meanwhile, the major European markets have moved to the upside on the day. While the French CAC 40 Index has advanced by 0.9 percent, the German DAX Index is up by 03 percent and the U.K.'s FTSE 100 Index is up by 0.1 percent.

In commodities trading, crude oil futures are sliding $0.82 to $63.79 a barrel after climbing $0.63 to $64.61 a barrel a barrel on Wednesday. Meanwhile, an ounce of gold is trading at $1,299.50, down $14.40 compared to the previous session's close of $1,313.90. On Wednesday, gold rose $5.60.

On the currency front, the U.S. dollar is trading at 111.31 yen compared to the 111.01 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.1263 compared to yesterday's $1.1274.

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