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U.S. Stocks May Open Modestly Lower Amid Focus On Trade Talks

wallstreet oct25 10oct19 lt

Stocks may move to the downside in early trading on Thursday, giving back some ground following the rally seen in the previous session. The major index futures are currently pointing to a modestly lower open for the markets, with the Dow futures down by 25 points.

Uncertainty about U.S.-China trade talks may weigh on Wall Street as traders digest conflicting reports about the high-level negotiations set to get underway today.

A report from the South China Morning Post said deputy-level talks aimed at laying the groundwork for the high-level negotiations failed to make any progress on critical issues.

"They have made no progress," a source familiar with the talks told the SCMP, adding that the Chinese side had not made headway in persuading U.S. negotiators to consider a freeze on tariff increases.

The source also told the SCMP the Chinese delegation may leave Washington earlier than expected, with Chinese Vice Premier Liu He heading to the airport on Friday rather than Saturday as previously planned.

However, a White House spokesman told CNBC's Kayla Tausche the SCMP's report was inaccurate, saying, "We are not aware of a change in the Vice Premier's travel plans at this time."

A principal in the negotiations later told CNBC the schedule has become "fluid" and suggested Liu could leave early while Vice Minister Liao Min stays in Washington to continue negotiations.

As a result of the focus on the trade talks, traders may shrug off a usually closely watched report from the Labor Department showing U.S. consumer prices were essentially flat in the month of September.

The Labor Department said its consumer price index was unchanged in September after inching up by 0.1 percent in August. Economists had expected another 0.1 percent uptick.

Consumer prices came in unchanged as higher prices for shelter and food were offset by declines in prices for energy and used cars and trucks.

Excluding food and energy prices, core consumer prices crept up by 0.1 percent in September after rising by 0.3 percent for three straight months. Core prices had been expected to rise by 0.2 percent.

A separate report released by the Labor Department showed a modest decrease in first-time claims for U.S. unemployment benefits in the week ended October 5th.

The report said initial jobless claims dropped to 210,000, a decrease of 10,000 from the previous week's revised level of 220,000.

Economists had expected jobless claims to come in unchanged compared to the 219,000 originally reported for the previous week.

Stocks moved mostly higher over the course of the trading day on Wednesday, as traders expressed renewed optimism about upcoming U.S.-China trade talks. With the advance, the major averages partly offset the steep losses posted on Tuesday.

The major averages pulled back off their highs going into the close but remained firmly positive. The Dow climbed 181.97 points or 0.7 percent to 26,346.01, the Nasdaq surged up 79.96 points or 1 percent to 7,903.74 and the S&P 500 jumped 26.34 points or 0.9 percent to 2,919.40.

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Thursday. Japan's Nikkei 225 Index rose by 0.5 percent, while China's Shanghai Composite Index advanced by 0.8 percent.

Meanwhile, the major European markets are turning in a mixed performance on the day, While the German DAX Index is just below the unchanged line, the U.K'.s FTSE 100 Index is up by 0.1 percent and the French CAC 40 Index is up by 0.3 percent.

In commodities trading, crude oil futures are rising $0.51 to $53.10 a barrel after edging down $0.04 to $52.59 a barrel on Wednesday. Meanwhile, after climbing $8.90 to $1,512.80 an ounce in the previous session, gold futures are sliding $5.10 to $1,507.70 an ounce.

On the currency front, the U.S. dollar is trading at 107.60 yen compared to the 107.48 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.1024 compared to yesterday's $1.0971.

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