logo
  

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

wallstreet july20 12may22 lt

After coming under pressure over the course of the previous session, stocks are likely to see further downside in early trading on Thursday. The major index futures are currently pointing to a lower open for the markets, with the S&P 500 futures down by 0.8 percent.

Worries about the Federal Reserve aggressively raising interest rates in an effort to combat elevated inflation may continue to weigh on the markets.

Traders have recently expressed concerns more aggressive moves by the Fed and other central banks could lead to a period of stagflation or an outright recession.

Potentially adding to the worries, the Labor Department released a report this morning showing the annual rate of producer price growth slowed by less than expected in the month of April.

The report showed the annual rate of growth in producer prices slowed to 11.0 percent in April from a record high 11.5 percent in March, although economists had expected a bigger slowdown to 10.7 percent.

Core producer prices, which exclude prices for food, energy and trade services, were up by 6.9 percent compared to a year ago, reflecting a modest slowdown from the 7.1 percent spike seen in the previous month.

A separate report released by the Labor Department unexpectedly showed a slight increase in first-time claims for U.S. unemployment benefits in the week ended May 7th.

The Labor Department said initial jobless claims crept up to 203,000, an increase of 1,000 from the previous week's revised level of 202,000.

The uptick surprised economists, who had expected jobless claims to dip to 195,000 from the 200,000 originally reported for the previous week.

A notable drop by shares of Disney (DIS) may also weigh on the markets, with the entertainment giant slumping by 4 percent in pre-market trading after reporting its fiscal second quarter results.

Stocks saw considerable volatility in morning trading on Wednesday before once again coming under substantial selling pressure in the afternoon. With the steep drop on the day, the major averages all ended the session at their lowest closing levels in over a year.

The major averages saw further downside going into the close, ending the day near their lows of the session. The Dow slumped 326.63 points or 1 percent to 31,834.11, the Nasdaq plunged 373.44 points or 3.2 percent to 11,364.24 and the S&P 500 tumbled 65.87 points or 1.7 percent to 3,935.18.

In overseas trading, stock markets across the Asia-Pacific region moved notably lower during trading on Thursday. Japan's Nikkei 225 Index dove by 1.8 percent, while Hong Kong's Hang Seng Index plummeted by 2.2 percent.

The major European markets have also shown significant moves to the downside on the day. While the French CAC 40 Index has plunged by 2.6 percent, the German DAX Index and the U.K.'s FTSE 100 Index are down by 2.2 percent and 2.1 percent, respectively.

In commodities trading, crude oil futures are slumping $1.41 to $104.30 a barrel after surging $5.95 to $105.71 a barrel on Wednesday. Meanwhile, after climbing $12.70 to $1,853.70 an ounce in the previous session, gold futures are falling $7.60 to $1,846.10 an ounce.

On the currency front, the U.S. dollar is trading at 128.10 yen versus the 129.97 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.0423 compared to yesterday's $1.0513.

For comments and feedback contact: editorial@rttnews.com

Business News

Editors Pick
The TJX Companies, Inc. (TJX) said its first-quarter pretax profit margin and earnings per share, each on an adjusted basis, exceeded its plans even though sales were slightly below planned range. Adjusted pretax margin was 9.4%, excluding a 1.9 percentage point charge related to a write-down of the... Apple Inc. is delaying its latest plan to ask employees to come back to the office three days a week, but will continue with its plan of two days in office a week, Bloomberg reported. Citing an internal memo, the report also said the tech major is again requiring its staff to wear masks in common spaces, meeting rooms, hallways, and elevators, as well as at 100 US stores. The U.S. Food and Drug Administration or FDA has urged infant formula manufacturers to import infant formula products to the United States to meet the ongoing severe supply shortage. In order to further increase the availability of infant formula in the country, while protecting the health of infants, the regulator announced a guidance outlining increased flexibilities for the global manufacturers
Follow RTT