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U.S. Stocks May See Further Downside In Early Trading

wallstreet oct05 09sep21 lt

After ending the previous session mostly lower, stocks may see further downside in early trading on Thursday. The major index futures are currently pointing to a modestly lower open for the markets, with the Dow futures down by 46 points.

Continued concerns about the rapid spread of the delta variant of the coronavirus may weigh on Wall Street along with uncertainty about the outlook for monetary policy.

The futures pared their losses after the European Central Bank announced it would slow the pace of asset purchases under its pandemic emergency purchase program.

The Federal Reserve could also reveal plans to begin scaling back its asset purchases following a meeting later this month.

The asset purchase program has helped support stocks throughout much of the Covid-19 pandemic, leading to some worries about the impact of tapering.

On the U.S. economic front, the Labor Department released a report showing a bigger than expected decrease in first-time claims for U.S. unemployment benefits in the week ended September 4th.

The report said initial jobless claims fell to 310,000, a decrease of 35,000 from the previous week's revised level of 345,000. Economists had expected jobless claims to edge down to 335,000 from the 340,000 originally reported for the previous week.

With the bigger than expected decrease, jobless claims once again dropped to their lowest level since hitting 256,000 in the week ended March 14, 2020.

Stocks moved mostly lower during trading on Wednesday following the mixed performance seen on Tuesday. With the drop on the day, the tech-heavy Nasdaq pulled back off Tuesday's record closing high.

The major averages all finished the day in negative territory. The Dow dipped 68.93 points or 0.2 percent to 35,031.07, the Nasdaq slid 87.69 points or 0.6 percent to 15,286.64 and the S&P 500 edged down 5.96 points or 0.1 percent to 4,514.07.

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Thursday. Japan's Nikkei 225 Index fell by 0.6 percent, while Hong Kong's Hang Seng Index plunged by 2.3 percent.

Meanwhile, the major European markets are turning in a mixed performance following the ECB announcement. While the French CAC 40 Index has edged up by 0.2 percent, the German DAX Index is down by 0.1 percent and the U.K.'s FTSE 100 Index is down by 1.2 percent.

In commodities trading, crude oil futures are slipping $0.24 to $69.06 a barrel after jumping $0.95 to $69.30 a barrel on Wednesday. Meanwhile, after falling $5 to $1,793.50 an ounce in the previous session, gold futures are inching up $1.30 to $1,794.80 an ounce.

On the currency front, the U.S. dollar is trading at 109.87 yen versus the 110.25 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.1815 compared to yesterday's $1.1816.

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