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Trade Concerns, OPEC Uncertainty May Weigh On Wall Street

The major U.S. index futures are pointing to a lower opening on Thursday, with stocks likely to move to the downside following the mixed performance seen in the previous session.

Lingering concerns about the trade dispute between the U.S. and China may weigh on the markets along with uncertainty the outcome of this week's OPEC meeting.

Saudi Arabia and Russia are reportedly pushing for an increase in oil production, with OPEC expected to announce its decision on output on Friday.

After an initial move to the upside, stocks turned in a somewhat lackluster performance over the course of the trading session on Wednesday. Despite the choppy trading, the tech-heavy Nasdaq reached a new record closing high.

The major averages eventually ended the session mixed. While the Dow edged down 42.41 points or 0.2 percent to 24,657.80, the Nasdaq climbed 55.93 points or 0.7 percent to 7,781.51 and the S&P 500 rose 4.73 points or 0.2 percent to 2,767.32.

The advance by the Nasdaq partly reflected strength among media stocks after Disney (DIS) raised its offer for most of Twenty-First Century Fox's (FOXA) media assets.

Disney boosted its bid for the Fox assets $7.1 billion to $38 per share, exceeding the offer made by rival Comcast (CMCSA).

On the other hand, notable declines by Travelers (TRV) and McDonald's (MCD) contributed to the modest loss posted by the Dow.

General Electric (GE) also moved lower on the day following news it will be replaced in the Dow by Walgreens Boots Alliance (WBA).

Meanwhile, traders largely shrugged off concerns about a trade war been the U.S. and China that contributed to weakness on Tuesday.

President Donald Trump has directed U.S. Trade Representative Robert Lighthizer to identify $200 billion worth of Chinese goods for additional tariffs at a rate of 10 percent.

Trump said the tariffs will go into effect if China refuses to change its unfair trade practices and insists on going forward with recently announced tariffs.

The president threatened to pursue additional tariffs on another $200 billion worth of goods if China increases its tariffs yet again.

Despite the threat from Trump, China vowed to retaliate with "strong" countermeasures if the U.S. goes ahead with the new tariffs.

On the U.S. economic front, the National Association of Realtors released a report showing an unexpected decrease in existing home sales in the month of May.

NAR said existing home sales fell by 0.4 percent to an annual rate of 5.43 million in May after plunging by 2.7 percent to a downwardly revised 5.45 million in April.

The drop surprised economists, who had expected existing home sales to climb to an annual rate of 5.52 million from the 5.46 million originally reported for the previous month.

Many of the major sectors showed only modest moves on the day, although significant strength was visible among natural gas stocks.

Reflecting the strength in the natural gas sector, the NYSE Arca Natural Gas Index jumped by 1.8 percent to its best closing level in almost five months.

The strength among natural gas stocks came amid an increase by the price of the commodity, with natural gas for July delivery climbing $0.064 to $2,964 per million BTUs.

Biotechnology stocks also showed a strong move to the upside, driving the NYSE Arca Biotechnology Index up by 1.7 percent. With the gain, the index reached a record closing high.

Steel, tobacco, and real estate stocks also moved notably higher on the day, while gold stocks moved lower along with the price of the precious metal.

Commodity, Currency Markets

Crude oil futures are falling $0.70 to $65.01 a barrel after climbing $0.81 to $65.71 a barrel on Wednesday. Meanwhile, an ounce of gold is trading at $1,266.60, down $7.90 compared to the previous session's close of $1,274.50, On Wednesday, gold fell $4.10.

On the currency front, the U.S. dollar is trading at 110.27 yen compared to the 110.36 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.1576 compared to yesterday's $1.1572.


Asian stocks finished on a mixed note Thursday as traders waited for Friday's OPEC meeting and new developments on global trade. Speculation of imminent monetary policy easing in China helped to limit overall losses to some extent.

Chinese shares hit a two-year closing low as trade war woes overshadowed media reports that Beijing will undertake measures to boost credit supply to smaller companies. The benchmark Shanghai Composite Index slumped 40.12 points or 1.4 percent to 2,875.61, while Hong Kong's Hang Seng Index tumbled 400.12 points or 1.4 percent to 29,296.05.

Meanwhile, Japanese shares eked out modest gains as the yen weakened and technology stocks followed their U.S. peers higher. The Nikkei 225 Index climbed 137.61 points or 0.61 percent to 22,693.04, although the broader Topix Index gave up earlier gains to end lower by 0.1 percent at 1,750.63.

Taiyo Yuden soared 4.3 percent and TDK Corp rallied 3.3 percent in the technology sector. Banks underperformed on a Nikkei report that bad debts from cash advances are piling up at the country's largest banks. Mitsubishi UFJ Financial dropped 2.2 percent and rival Sumitomo Mitsui Financial lost 2.4 percent.

Australian shares extended gains from the previous session to reach a fresh 10-year high. The benchmark S&P/ASX 200 Index jumped 59.50 points or 1 percent to 6,232.10, while the broader All Ordinaries Index advanced 0.9 percent to end at 6,332.90.

Mining heavyweights BHP Billiton and Rio Tinto rose about half a percent as iron ore prices turned higher. The big four banks ended up between half a percent and 1.4 percent.

Bellamy's Australia soared 6.2 percent after it signed a deal with global dairy giant Fonterra to help Tasmanian farmers switch to organic practices. Outdoor advertising company APN Outdoor jumped over 12 percent after it received a $1.1 billion takeover offer from French advertising firm JCDecaux.

On the other hand, Atlas Iron dropped 2.2 percent after its board backed a takeover bid by billionaire Gina Rinehart. Mineral Resources declined 1.5 percent. Energy stocks turned in a mixed performance despite crude oil prices rising overnight.


European stocks have turned lower on Thursday as trade worries persist and investors wait to see if OPEC and its allies will reach consensus on a deal to increase oil supply.

The Bank of England voted 6 to 3 to keep its key interest rate unchanged, while members unanimously voted to maintain quantitative easing at 435 billion pounds.

While the German DAX Index has slid by 0.9 percent, the U.K.'s FTSE 100 Index and the French CAC 40 Index are both down by 0.6 percent.

British property developer Berkeley Group Holdings has moved to the downside, a day after it warned of a 30 percent drop in pre-tax profit this year.

German automaker Daimler has also slumped after it issued a profit warning, citing higher import tariffs amid an escalating trade dispute between the U.S. and China.

Meanwhile, Shire Plc shares have rallied. The drug maker received approval from the FDA to expand the offering of Cinryze to children aged six years and older with hereditary angioedema.

French advertising company JCDecaux has also moved higher after it made a conditional $803 million takeover offer for Australia's APN Outdoor Group.

U.S. Economic Reports

First-time claims for U.S. unemployment benefits edged lower in the week ended June 16th, according to a report released by the Labor Department.

The report said initial jobless claims dipped to 218,000, a decrease of 3,000 from the previous week's revised level of 221,000.

Economists had expected jobless claims to inch up to 220,000 from the 218,000 originally reported for the previous week.

A separate report released by the Federal Reserve Bank of Philadelphia showed a much bigger than expected slowdown in the pace of growth in regional manufacturing activity in the month of June.

The Philly Fed said its index for current general activity slumped to 19.9 in June from 34.4 in May. While a positive reading still indicates growth in regional manufacturing activity, the index had been expected to dip to 29.0.

At 10 am ET, the Conference Board is scheduled to release its report on leading economic indicators in the month of May. The leading economic index is expected to rise by 0.3 percent.

The Treasury Department is due to announce the details of next week's auctions of two-year, five-year, and seven-year notes at 11 pm ET.

Stocks In Focus

Shares of Kroger (KR) are moving significantly higher in pre-market trading after the supermarket operator reported fiscal first quarter results that beat analyst estimates on both the top and bottom lines.

Chip maker Micron Technology (MU) may also see early strength after reporting better than expected fiscal third quarter earnings and providing upbeat guidance for the current quarter.

On the other hand, shares of American Outdoor Brands (AOBC) may come under pressure after the Smith & Wesson parent reported fiscal fourth quarter earnings that exceed estimates but said it expects another year of falling sales.

Athletic footwear and apparel giant Nike (NKE) may also move to the downside after UBS downgraded its rating on the company's stock to Neutral from Buy.

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