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

After ending the previous session mostly lower, 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 Dow futures up by just 11 points.

Traders may be reluctant to make significant moves ahead of the release of a Labor Department report on consumer price inflation on Friday.

The report is expected to show that consumer prices increased by 0.7 percent in May after rising by 0.3 percent in April. Core consumer prices, which exclude food and energy prices are expected to climb by 0.5 percent in May following a 0.6 percent advance in April.

The annual rate of consumer price growth is expected to hold at 8.3 percent, while the annual rate of core consumer price growth is expected to slow to 5.9 percent from 6.2 percent.

The inflation data could have an impact on the outlook for monetary policy ahead of the Federal Reserve’s decision on interest rates next Wednesday.

On the economic front, a report released by the Labor Department showed first-time claims for U.S. unemployment benefits rose by more than expected in the week ended June 4th.

The Labor Department said initial jobless claims climbed to 229,000, an increase of 27,000 from the previous week’s revised level of 202,000.

Economists had expected jobless claims to rise to 210,000 from the 200,000 originally reported for the previous week.

U.S. stocks drifted lower on Wednesday amid worries about soaring inflation, a global economic slowdown and prospects of tighter policy measures by the central bank.

Lowering of global growth forecasts by the World Bank and the Organization for Economic Cooperation and Development weighed as well. Higher treasury yields also contributed to the market’s decline.

The major averages all ended notably lower. The Dow ended with a loss of 269.24 points or 0.8 percent at 32,910.90 after staying in the red right through the day’s session. The S&P 500 closed lower by 44.91 points or 1.1 percent at 4,115.77.

The Nasdaq, which climbed to 12,235.78 after a weak start, turned weak past noon and finally ended the session with a loss of 88.96 points or 0.7 percent at 12,086.27.

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Thursday. China’s Shanghai Composite Index and Hong Kong’s Hang Seng Index fell by 0.8 percent and 0.7 percent, respectively, although Japan’s Nikkei 225 Index closed slightly higher.

The major European markets have also moved to the downside on the day. While the U.K.’s FTSE 100 Index has fallen by 0.8 percent, the French CAC 40 Index and the German DAX Index are both down by 1.2 percent.

In commodities trading, crude oil futures are inching up $0.02 to $122.13 a barrel after jumping $2.70 to $122.11 a barrel on Wednesday. Meanwhile, after rising $4.40 to $1,856.50 an ounce in the previous session, gold futures are edging down $1.90 to $1,854.60 an ounce.

On the currency front, the U.S. dollar is trading at 133.71 yen versus the 134.25 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.0763 compared to yesterday’s $1.0716.

Source: Read Full Article