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Stocks May Open Higher On Upbeat Economic Data - U.S. Commentary


After ending the previous session slightly lower, stocks may move back to the upside in early trading on Thursday. The major index futures are currently pointing to a modestly higher open for the markets, with the Dow futures up by 26 points.

The markets may benefit from the release of a batch of largely upbeat U.S. economic data, including a Commerce Department report showing retail sales rebounded by much more than expected in the month of March.

The Commerce Department said retail sales soared by 1.6 percent in March after edging down by 0.2 percent in February. Economists had expected retail sales to climb by 0.9 percent.

Excluding a jump in sales by motor vehicle and parts dealers, retail sales still surged up by 1.2 percent in March following a revised 0.2 percent dip in February.

Ex-auto sales had been expected to increase by 0.7 percent compared to the 0.4 percent drop originally reported for the previous month.

A separate report from the Labor Department showed initial jobless claims unexpectedly edged lower in the week ended April 13th, falling to a nearly 50-year low.

The report said initial jobless claims dipped to 192,000, a decrease of 5,000 from the previous week's revised level of 197,000.

Economists had expected jobless claims to rise to 205,000 from the 196,000 originally reported in the previous week.

With the unexpected decrease, initial jobless claims dropped to their lowest level since hitting 182,000 in September of 1969.

Meanwhile, the Philadelphia Federal Reserve released a report showing the pace of growth in regional manufacturing slowed by more than expected in the month of April following a significant rebound in the previous month.

The Philly Fed said its index for current manufacturing activity in the region dropped to 8.5 in April after jumping to 13.7 in March.

While a positive reading still indicates growth in regional manufacturing activity, economists had expected the index to show a more modest pullback to 10.4.

Traders are also digesting the latest batch of earnings news, although overall trading activity may be somewhat subdued ahead of the long Easter weekend.

Shortly after the start of trading, the Commerce Department is scheduled to release its report on business inventories in the month of February. Inventories are expected to climb by 0.4 percent.

The Conference Board is also due to release its report on leading economic indicators in the month of March. Economists expect the leading economist index to rise by 0.3 percent.

Stocks showed a lack of direction over the course of the trading day on Wednesday, extending the volatility seen late in Tuesday's session. The major averages spent much of the day bouncing back and forth across the unchanged line.

Eventually, the major averages ended the session slightly lower. The Dow edged down 3.12 points or less than a tenth of a percent to 26,449.54, the Nasdaq slipped 4.15 points or 0.1 percent to 7,996.08 and the S&P 500 dipped 6.61 points or 0.2 percent to 2,900.45.

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Thursday. Japan's Nikkei 225 Index slid by 0.8 percent, while China's Shanghai Composite Index fell by 0.4 percent.

Meanwhile, the major European markets have turned mixed on the day. While the U.K.'s FTSE 100 Index is just below the unchanged line, the French CAC 40 Index and the German DAX Index are up by 0.2 percent and 0.3 percent, respectively.

In commodities trading, crude oil futures are rising $0.20 to $63.96 a barrel after falling $0.29 to $63.76 a barrel a barrel on Wednesday. Meanwhile, an ounce of gold is unchanged compared to the previous session's close of $1,276.80. On Wednesday, gold edged down $0.40.

On the currency front, the U.S. dollar is trading at 111.97 yen compared to the 112.06 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.1245 compared to yesterday's $1.1296.

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