U.S. Stocks May Move Back To The Upside In Early Trading

After ending yesterday’s choppy trading session modestly lower, stocks may move back to the upside in early trading on Thursday. The major index futures are currently pointing to a higher open for the markets, with the S&P 500 futures up by 0.4 percent.

The futures saw continued strength following the release of a Labor Department report showing first-time claims for U.S. unemployment benefits dipped by less than expected last week.

The report said initial jobless claims slipped to 227,000, a decrease of 5,000 from the previous week’s revised level of 232,000.

Economists had expected jobless claims to fall to 220,000 from the 231,000 originally reported for the previous week.

With jobless claims remaining at a somewhat elevated level, the data may partly offset yesterday’s stronger-than-expected monthly jobs data.

While the monthly jobs report pointed to resilience in the labor market, the data also reduced optimism about further interest rate cuts in the near future.

The focus now shifts to the Labor Department’s report on consumer price inflation that is due to be released before the start of trading on Friday.

“Forecasts suggest the critical core CPI measure could ease to around 2.5%, marking a near five-year low,” said Daniela Hathorn, Senior Market Analyst at Capital.com. “If inflation comes in line with — or ideally below — expectations, the strength of the labor market may become secondary.”

She added, “A softer inflation print would keep rate cuts firmly priced in and could restore upward momentum in risk assets.”

Not long after the start of trading, the National Association of Realtors is due to release its report on existing home sales in the month of January.

Existing home sales are expected to tumble by 3.4 percent to an annual rate of 4.20 million in January after surging by 5.1 percent to an annual rate of 4.35 million in December.

After failing to sustain an initial move to the upside, stocks quickly gave back ground in early trading on Wednesday and showed a lack of direction over the remainder of the session.

The major averages spent the day bouncing back and forth across the unchanged line before eventually closing modestly lower.

The Dow slipped 66.74 points or 0.1 percent to 50,1212.40, the Nasdaq dipped 36.01 points or 0.2 percent to 23,066.47 and the S&P 500 edged down 0.34 points or less than a tenth of a percent to 6,941.47.

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance on Thursday. South Korea’s Kospi spiked by 3.1 percent, while Hong Kong’s Hang Seng Index slid by 0.9 percent and Japan’s Nikkei 225 Index closed marginally lower.

Meanwhile, the major European markets have all moved to the upside on the day. While the U.K.’s FTSE 100 Index is just above the unchanged line, the French CAC 40 Index is up by 1.0 percent and the German DAX Index is up by 1.4 percent.

In commodities trading, crude oil futures are falling $0.32 to $64.31 a barrel after jumping $0.67 to $64.63 a barrel on Wednesday. Meanwhile, after climbing $67.50 to $5,098.50 an ounce in the previous session, gold futures are slipped $7.60 to $5,090.90 an ounce.

On the currency front, the U.S. dollar is trading at 153.34 yen versus the 153.24 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.1879 compared to yesterday’s $1.1870.