U.S. Stocks May Move To The Downside In Early Trading

After ending the previous session mostly higher, stocks may move to the downside in early trading on Thursday. The major index futures are currently pointing to a lower open for the markets, with the Dow futures down by 219 points.

Profit taking may lead to initial weakness on Wall Street after the major averages reached record intraday highs earlier this week.

The Dow edged slightly lower on Wednesday, although the blue chip index remains just shy of setting a new record closing high.

Upbeat news on the coronavirus vaccine front has contributed to recent strength in the markets, although the positive sentiment may be partly offset by a continued surge in cases across the U.S. and Europe.

Indications that the distribution of a potential vaccine is likely to face significant logistical challenges may also keep traders from making significant bets.

However, any early selling pressure is likely to be partly offset by a report from the Labor Department showing a bigger than expected decrease in first-time claims for unemployment benefits in the week ended November 7th.

The Labor Department said initial jobless claims fell to 709,000, a decrease of 48,000 from the previous week’s revised level of 757,000.

Economists had expected jobless claims to dip to 735,000 from the 751,000 originally reported for the previous week.

With the bigger than expected decrease, jobless claims fell to their lowest level since before lockdowns were imposed in mid-March.

A separate report released by the Labor Department showed consumer prices came in flat in the month of October.

The Labor Department said its consumer price index was unchanged in October after rising by 0.2 percent in September. Economists had expected another 0.2 percent uptick.

Excluding food and energy prices, consumer prices were still flat in October after edging up by 0.2 percent in September. Core prices were also expected to inch up by another 0.2 percent.

Following the mixed performance seen on Tuesday, stocks moved mostly higher during trading on Wednesday. The tech-heavy Nasdaq showed a particularly strong move to the upside, although the Dow closed slightly lower.

While the Dow edged down 23.29 points or 0.1 percent to 29,397.63, the broader Nasdaq and S&P 500 both closed firmly in positive territory. The Nasdaq surged up 232.58 points or 2 percent to 11,786.43 and the S&P 500 climbed 27.13 points or 0.8 percent to 3,572.66.

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower on Thursday, although Japan’s Nikkei 225 Index bucked the downtrend and rose by 0.7 percent. China’s Shanghai Composite Index edged down by 0.1 percent and South Korea’s Kospi fell by 0.4 percent.

The major European markets have also moved to the downside on the day. While the French CAC 40 Index has tumbled by 1.5 percent, the German DAX Index is down by 1.2 percent and the U.K.’s FTSE 100 Index is down by 0.9 percent.

In commodities trading, crude oil futures are rising $0.14 to $41.59 a barrel after inching up $0.09 to $41.45 a barrel on Wednesday. Meanwhile, after slumping $14.80 to $1,861.60 an ounce in the previous session, gold futures are climbing $10.50 to $1,872.10 an ounce.

On the currency front, the U.S. dollar is trading at 105.25 yen versus the 105.43 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.1804 compared to yesterday’s $1.1777.

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