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Trade Concerns May Continue To Weigh On Wall Street

The major U.S. index futures are pointing to a lower opening on Thursday, with stocks likely to extend the pullback seen over the course of the previous session.

The downward momentum on Wall Street may partly reflect concerns about the global economic impact on the ongoing trade dispute between the U.S. and other major economies.

Negative sentiment may also be generated in reaction to a Commerce Department report showing weaker than previously estimated U.S. economic growth in the first quarter.

After failing to sustain an early move to the upside, stocks turned lower over the course of the trading session on Wednesday. The major averages all pulled back off their best levels of the day and into negative territory.

The major averages ended the session just off their worst levels of the day. The Dow fell 165.52 points or 0.7 percent to 24,117.59, the Nasdaq plunged 116.54 points or 1.5 percent to 7,445.08 and the S&P 500 slid 23.43 points or 0.9 percent to 2,699.63.

Stocks initially benefited from news that President Donald Trump's plan to crack down on Chinese investments in the U.S. is less harsh than feared.

Administration officials told reporters Trump wants to strengthen the Committee on Foreign Investment in the U.S. to prevent foreign companies from violating intellectual-property rights of American companies.

Trump expressed support for legislation that would expand CFIUS' authority in a White House statement released Wednesday.

The president said the bill known as the Foreign Investment Risk Review Modernization Act would enhance the administration's ability to protect the U.S. from new and evolving threats posed by foreign investment.

Trump argued the legislation would still sustain the strong, open investment environment to which the country is committed and which benefits the U.S. economy.

Reports earlier this week suggested Trump intended to use the International Emergency Economic Powers Act of 1977 to limit Chinese investment in the U.S.

However, technology stocks came under pressure over the course of the session, contributing to the steep drop by the Nasdaq.

In U.S. economic news, the Commerce Department released a report showing a smaller than expected decrease in new orders for U.S. manufactured durable goods in the month of May.

The Commerce Department said durable goods orders fell by 0.6 percent in May after tumbling by a revised 1.0 percent in April.

Economists had expected durable goods orders to drop by 1.0 percent compared to the 1.6 percent slump that had been reported for the previous month.

Excluding orders for transportation equipment, durable goods orders dipped by 0.3 percent in May after spiking by 1.9 percent in April. Ex-transportation orders had been expected to rise by 0.5 percent.

Meanwhile, a separate report from the National Association of Realtors showed an unexpected decrease in pending home sales in May.

NAR said its pending home sales index fell by 0.5 percent to 105.9 in May after slumping by 1.3 percent to 106.4 in April. Economists had expected pending home sales to climb by 0.5 percent.

Biotechnology stocks moved sharply lower over the course of the trading session, dragging the NYSE Arca Biotechnology Index down by 2.8 percent. With the drop, the index fell to its lowest closing level in over a month.

Substantial weakness also emerged among semiconductor stocks, as reflected by the 2.5 percent loss posted by the Philadelphia Semiconductor Index. The index also slid to its worst closing level in well over a month.

Financial, steel, gold and computer hardware stocks also came under pressure over the course of the session, contributing to the pullback by the broader markets.

On the other hand, significant strength remained visible among energy stocks, which moved higher along with the price of crude oil.

Reflecting the strength in the energy sector, the Philadelphia Oil Service Index surged up by 2.9 percent, while the NYSE Arca Natural Gas Index and the NYSE Arca Oil Index both climbed by 1.1 percent.

Commodity, Currency Markets

Crude oil futures are falling $0.34 to $72.42 a barrel after spiking $2.23 to $72.76 a barrel on Wednesday. Meanwhile, an ounce of gold is trading at $1,253.90, down $2.20 compared to the previous session's close of $1,256.10. On Wednesday, gold slid $3.80.

On the currency front, the U.S. dollar is trading at 110.10 yen compared to the 110.26 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.1589 compared to yesterday's $1.1554.

Asia

Asian stocks ended on a mixed note on Thursday as investors grappled with conflicting signals from senior officials in the Trump administration on trade policy.

China's Shanghai Composite Index dropped 27.29 points or 1 percent to 2,785.98 amid renewed trade tensions and ahead of Chinese manufacturing and non-manufacturing data due on Saturday. Meanwhile, Hong Kong's Hang Seng Index reversed early losses to 141.06 points or 0.5 percent higher at 28,497.

Japanese shares ended largely unchanged near one-month lows due to uncertainty over the Trump administration's trade policy. The Nikkei 225 Index ended marginally lower at 22,270.39 after falling by as much as 1 percent earlier in the day. The broader Topix Index closed 0.3 percent lower at 1,727.

Showa Shell fell 3.8 percent after hitting a record high the previous day on reports that Idemitsu Kosan's founding family is likely to drop its opposition to long-stalled plans for a merger with the company.

Australian shares eked out modest gains, led by banks, energy and materials stocks. The benchmark S&P/ASX 200 Index rose 19.50 points or 0.3 percent to 6,215.40, while the broader All Ordinaries Index ended up 15.30 points or 0.2 percent at 6,305.80.

Mining heavyweights BHP Billiton and Rio Tinto jumped 1-2 percent as base metal prices recovered on the London Metal Exchange and Chinese iron ore futures rose after the release of weekly steel inventory data.

The big four banks rose between 0.6 percent and 0.9 percent as investors looked for high dividend yields.

Energy stocks Woodside Petroleum, Santos, Origin Energy and Oil Search climbed 1-3 percent after U.S. oil prices jumped more than 3 percent on Wednesday to reach three-and-a-half year highs, helped by supply disruptions in Libya and Canada as well as government data showing a bigger-than-expected drop in U.S. crude stockpiles.

On the other hand, realty stocks closed broadly lower amid signs of a softening housing market. Stockland Corp. tumbled 3.2 percent and Goodman Group fell over 1 percent.

Europe

European stocks have moved lower on Thursday as concerns over global trade persisted and investors turned their focus to the two-day European Union meeting on migration policy that's kicking off in Brussels today.

While the German DAX Index has tumbled by 1.4 percent, the French CAC 40 Index is down by 0.8 percent and the U.K.'s FTSE 100 Index is down by 0.5 percent.

Germany's Thyssenkrupp has moved lower on reports that it is close to concluding a $17.4 billion deal with Tata Steel to combine their European assets.

French utility Suez has also dropped after Berenberg cut its rating on the stock. John Wood Group has tumbled in London after leaving its full-year outlook unchanged.

At the same time, Swedish retailer Hennes & Mauritz AB has rallied after reporting its second quarter results.

In economic releases, German consumer confidence is set to remain stable in July, survey data from market research group GfK showed.

The forward-looking consumer sentiment index held steady at 10.7 points. This was slightly above the expected level of 10.6.

The pound hit a fresh 2018 low against the dollar after Bank of England Deputy Governor Jon Cunliffe warned about high levels of household debt, saying households that have high debt could be badly affected in a recession.

U.S. Economic Reports

Reflecting downward revisions to private inventory investment, consumer spending, and exports, the Commerce Department released a report showing an unexpected downward revision to the pace of U.S. economic growth in the first quarter.

The Commerce Department said real gross domestic product increased by 2.0 percent in the first quarter compared to the previous estimate of 2.2 percent growth. Economists had expected the pace of GDP growth to be unrevised.

A separate report from the Labor Department showed a bigger than expected increase in initial jobless claims in the week ended June 23rd.

The report said initial jobless claims rose to 227,000, an increase of 9,000 from the previous week's unrevised level of 218,000. Economists had expected jobless claims to inch up to 220,000.

At 10:45 am ET, St. Louis Federal Reserve President James Bullard is due to participate in a moderated conversation on the U.S. Economy and Monetary Policy at the Ascension Health Management Annual Conference in St. Louis.

The Treasury Department is scheduled to announce the results of its auction of $30 billion worth of seven-year notes at 1 pm ET.

Stocks In Focus

Shares of Pier 1 Imports (PIR) is moving sharply lower in pre-market trading after the home furnishings retailer reported a narrower than expected fiscal first quarter loss but weaker than expected revenue.

Home goods retailer Bed Bath & Beyond (BBBY) may also move to the upside after reporting fiscal first quarter earnings that beat analyst estimates but an unexpected drop in same-store sales.

On the other hand, shares of Accenture (ACN) are likely to see early strength after the consulting firm reported fiscal third quarter results that exceeded expectations on both the top and bottom lines.

Madison Square Garden (MSG) is also moving significantly higher in pre-market trading after its board authorized the exploration of a possible spin-off that would create a separately-traded public company comprised of its sports businesses, including the New York Knicks and New York Rangers.

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