U.S. Stocks May Show A Lack Of Direction In Early Trading

wallstreet 31mar22 lt

Following the pullback seen in the previous session, stocks may show a lack of direction in early trading on Thursday. The major index futures are currently pointing to a roughly flat open for the markets, with the S&P 500 futures down by just 1 point.

Traders may be reluctant to make significant moves ahead of the release of the Labor Department's closely watched monthly employment report on Friday.

Economists currently expect the report to show employment jumped by 490,000 jobs in March after surging by 678,000 jobs in February. The unemployment rate is expected to edge down to 3.7 percent from 3.8 percent.

The jobs data could impact expectations regarding how quickly the Federal Reserve plans to raise interest rates in the month ahead.

A day ahead of the release of the closely watched monthly jobs report, the Labor Department released a report on Thursday showing a modest increase in first-time claims for U.S. unemployment benefits in the week ended March 26th.

The report showed initial jobless claims edged up to 202,000, an increase of 14,000 from the previous week's revised level of 188,000.

Economists had expected jobless claims to inch up to 197,000 from the 187,000 originally reported for the previous week.

The figure originally reported for the previous week reflected the lowest number of jobless claims since September of 1969.

The Commerce Department also released a report showing personal income in the U.S. increased in line with economist estimates in the month of February.

The report showed personal income rose by 0.5 percent in February after inching up by a revised 0.1 percent in January.

Economists had expected personal income to climb by 0.5 percent compared to the unchanged reading originally reported for the previous month.

Meanwhile, the Commerce Department said personal spending edged up by 0.2 percent in February after surging by an upwardly revised 2.7 percent in January.

Personal spending was expected to increase by 0.5 percent compared to the 2.1 percent jump originally reported for the previous month.

A reading on inflation said to be preferred by the Federal Reserve showed the annual rate of core consumer price growth accelerated to 5.4 percent in February from 5.2 percent in January.

The major U.S. averages ended lower on Wednesday amid fading hopes about peace talks between Russia and Ukraine after the former continued to shell certain areas of Ukraine despite having promised to scale down military operations on Tuesday.

Rising worries about inflation and imminent aggressive monetary tightening by the Federal Reserve also weighed on sentiment.

Profit taking after three straight days of gains pushed the Dow to a weak close. The Nasdaq, which scored strong gains in the previous two sessions, ended with a more pronounced loss, as chip stocks fell sharply.

The Dow ended with a loss of 65.38 points or 0.2 percent at 35,228.81, recovering well from a low of 35,058.58 it touched in the final hour. The S&P 500 drifted down 29.15 points or 0.6 percent to close at 4,603.45, while the Nasdaq ended down by 177.36 points or 1.2 percent at 14,442.27.

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Thursday. Japan's Nikkei 225 Index slid by 0.7 percent, while China's Shanghai Composite Index fell by 0.4 percent.

The major European markets have also moved to the downside on the day. While the French CAC 40 Index has fallen by 0.4 percent, the German DAX Index and the U.K.'s FTSE 100 Index are both down by 0.3 percent.

In commodities trading, crude oil futures are plunging $5.94 to $101.88 a barrel after surging $3.58 to $107.82 a barrel on Wednesday. Meanwhile, after jumping $21 to $1,939 an ounce in the previous session, gold futures are edging down $1.10 to $1,937.90 an ounce.

On the currency front, the U.S. dollar is trading at 121.70 yen versus the 121.83 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.1099 compared to yesterday's $1.1159.

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