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U.S. Stocks May Move In Opposite Directions In Early Trading

wallstreet july27 25feb21 lt

Following the rally seen over the course of the previous session, U.S. stock futures are pointing to a mixed open for the markets on Thursday. The Dow futures have edged up by 27 points, while the Nasdaq futures are down by 97.25 points.

The uptick by the Dow futures comes after the blue chip index moved sharply higher during trading on Wednesday, reaching a new record closing high.

The Dow may benefit from some investors cycling out of high-flying technology stocks amid concerns about the recent jump in bond yields.

The yields on ten-year notes and thirty-year bonds reached their highest intraday levels in a year in early trading but have recently given back some ground.

The pullback by yields comes despite the release of a batch of largely upbeat U.S. economic data, including a report from the Labor Department showed a steep drop in first-time claims for U.S. unemployment benefits in the week ended February 20th.

The Labor Department said initial jobless claims tumbled to 730,000, a decrease of 111,000 from the previous week's revised level of 841,000.

Economists had expected jobless claims to drop to 838,000 from the 861,000 originally reported for the previous week.

With the much bigger than expected decrease, jobless claims fell to their lowest level since hitting 716,000 in the week ended November 28th.

The Commerce Department also released a report showing new orders for U.S. manufactured durable goods spiked by much more than expected in the month of January.

The report said durable goods orders soared by 3.4 percent in January after jumping by an upwardly revised 1.2 percent in December.

Economists had expected durable goods orders to surge up by 1.1 percent compared to the 0.5 percent increase that had been reported for the previous month.

Excluding a sharp increase in orders for transportation equipment, durable goods orders still jumped by 1.4 percent in January after spiking by an upwardly revised 1.7 percent in December.

Ex-transportation orders had been expected to climb by 0.7 percent, matching the increase that had been reported for the previous month.

A separate report released by the Commerce Department showed U.S. gross domestic product jumped by slightly more than originally estimated in the fourth quarter of 2020.

The Commerce Department said GDP surged up by 4.1 percent in the fourth quarter compared to the previously reported 4.0 percent spike. The upward revision matched economist estimates.

Not long after the start of trading, the National Association of Realtors is scheduled to release its report on pending home sales in the month of January. Pending home sales are expected to come in unchanged.

A pending home sale is one in which a contract was signed but not yet closed. Normally, it takes four to six weeks to close a contracted sale.

After recovering from the sell-off seen early in Tuesday's session, stocks continued to advance over the course of the trading day on Wednesday. With the upward move, the Dow ended the session at a new record closing high.

The Dow soared 424.51 points or 1.4 percent to 31,961.86 and the S&P 500 jumped 44.06 points or 1.1 percent to 3,925.43. The tech-heavy Nasdaq also surged up 132.77 points or 1 percent to 13,597.97 after tumbling by nearly 180 points in early trading.

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Thursday. Japan's Nikkei 225 Index shot up by 1.7 percent, while South Korea's Kospi spiked by 3.5 percent.

Meanwhile, the major European markets are turning in a mixed performance on the day. While the German DAX Index is down by 0.2 percent, the French CAC 40 Index is nearly unchanged and the U.K.'s FTSE 100 Index is up by 0.3 percent.

In commodities trading, crude oil futures are edging down $0.01 to $63.21 a barrel after jumping $1.55 to $63.22 a barrel on Wednesday. Meanwhile, after falling $8 to $1,797.90 an ounce in the previous session, gold futures are tumbling $18.90 to $1,779 an ounce.

On the currency front, the U.S. dollar is trading at 106.10 yen versus the 105.87 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.2223 compared to yesterday's $1.2166.

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