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Major Averages May Move In Opposite Directions At The Open - U.S. Commentary


With traders digesting a mixed batch of earnings news, the major averages may move in opposite directions in early trading on Thursday. The major index futures are currently pointing to a mixed open for the markets, with the Dow futures down by 69 points but the Nasdaq futures up by 30 points.

An initial drop by shares of 3M (MMM) is likely to weigh on the Dow, with the diversified manufacturer plunging by 8 percent in pre-market trading.

The pressure on 3M comes after the company reported weaker than expected first quarter results and lowered its full-year guidance.

On the other hand, the tech-heavy Nasdaq is likely to benefit from early jumps by Facebook (FB) and Microsoft (MSFT), which are both seeing substantial pre-market strength.

The social media giant and the software giant both reported quarterly results that exceeded analyst estimates on both the top and bottom lines.

A mixed batch of U.S. economic news may also pull the major averages in opposite directions ahead of the release of closely watched first quarter GDP data on Friday.

The Commerce Department released a report showing durable goods orders jumped by much more than expected in the month of March, reflecting a significant rebound in orders for transportation equipment,

The report said durable goods orders surged up by 2.7 percent in March after tumbling by a revised 1.1 percent in February.

Economists had expected durable goods orders to climb by 0.8 percent compared to the 1.6 percent slump originally reported for the previous month.

Excluding the spike in orders for transportation equipment, durable goods orders rose by 0.4 percent in March after edging down by a revised 0.2 percent in February.

Ex-transportation orders had been expected to inch up by 0.2 percent compared to the 0.1 percent uptick originally reported for the previous month.

Meanwhile, the Labor Department released a separate report showing initial jobless claims rebounded by more than anticipated in the week ended April 20.

The Labor Department said initial jobless claims climbed to 230,000, an increase of 37,000 from the previous week's revised level of 193,000. Economists had expected jobless claims to rise to 200,000.

The bigger than expected increase came after the number of jobless claims in the previous week represented their lowest level since hitting 182,000 in September of 1969.

Following the notable advance seen on Tuesday, stocks showed a lack of direction over the course of the trading day on Wednesday. The major averages spent the day bouncing back and forth across the unchanged line.

At the close of trading, the major averages were modestly lower. The Dow fell 59.34 points or 0.2 percent to 26,597.05 points, the Nasdaq slipped 18.81 points or 0.2 percent to 8,102.01 and the S&P 500 dipped 6.43 points or 0.2 percent to 2,927.25.

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Thursday. Japan's Nikkei 225 Index rose by 0.5 percent, while Hong Kong's Hang Seng Index slumped by 0.9 percent.

Meanwhile, the major European markets have all moved to the downside on the day. While the U.K.'s FTSE 100 Index is down by 0.5 percent, the French CAC 40 Index is down by 0.2 percent and the German DAX Index is just below the unchanged line.

In commodities trading, crude oil futures are rising $0.17 to $66.06 a barrel after falling $0.41 to $65.89 a barrel a barrel on Wednesday. Meanwhile, an ounce of gold is trading at $1,278.90, down $0.50 compared to the previous session's close of $1,279.40. On Wednesday, gold climbed $6.20.

On the currency front, the U.S. dollar is trading at 111.84 yen compared to the 112.19 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.1127 compared to yesterday's $1.1155.

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