U.S. Stocks May Regain Ground On Upbeat Economic Data
Stocks may move to the upside in early trading on Thursday, regaining ground following the sell-off seen in the previous session. The major index futures are currently pointing to a higher open for the markets, with the Dow futures up by 38 points.
Early buying interest may be generated in reaction to a report showing a stronger than expected rebound by the U.S. economy in the third quarter.
The report from the Commerce Department said real gross domestic product skyrocketed by 33.1 percent in the third quarter after plunging by 31.4 percent in the second quarter. Economists had expected GDP to soar by 31.0 percent.
The substantial rebound in GDP reflected increases in consumer spending, private inventory investment, exports, non-residential fixed investment, and residential fixed investment.
Adding to the positive sentiment, the Labor Department released a report showing initial jobless claims fell to their lowest level since before the coronavirus-induced lockdowns in the week ended October 24th.
The report said initial jobless claims dropped to 751,000, a decrease of 40,000 from the previous week’s revised level of 791,000.
Economists had expected jobless claims to dip to 775,000 from the 787,000 originally reported for the previous week.
With the bigger than expected decrease, jobless claims fell to their lowest level since hitting 282,000 in the week ended March 14th.
Bargain hunting may also contribute to strength on Wall Street after the sell-off seen on Wednesday pulled the Dow down to a nearly three-month closing low. The Nasdaq and the S&P 500 also hit their lowest closing levels in over a month.
Shortly after the start of trading, the National Association of Realtors is due to release its report on pending home sales in the month of September.
Pending home sales are expected to jump by 3.4 percent in September after spiking by 8.8 percent to a record high in August.
A pending home sale is one in which a contract was signed but not yet closed. Normally, it takes four to six weeks to close a contracted sale.
Following the mixed performance seen on Tuesday, stocks moved sharply lower during trading on Wednesday. With the steep drop on the day, the Dow ended the session at its lowest closing level in nearly three months.
The major averages saw further downside going into the close, ending the session just off their lows of the day. The Dow tumbled 943.24 points or 3.4 percent to 26,519.95, the Nasdaq plunged 426.48 points or 3.7 percent to 11,004.87 and the S&P 500 plummeted 119.65 points or 3.5 percent to 3,271.03.
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Thursday. Japan’s Nikkei 225 Index fell by 0.4 percent, while Australia’s S&P/ASX 200 Index slumped by 1.6 percent.
The major European markets have also moved to the downside on the day. While the French CAC 40 Index has slid by 0.7 percent, the German DAX Index and the U.K.’s FTSE 100 Index are both down by 0.2 percent.
In commodities trading, crude oil futures are tumbling $1.90 to $35.49 a barrel after plunging $2.18 to $37.39 a barrel on Wednesday. Meanwhile, after plummeting $32.70 to $1,879.20 an ounce in the previous session, gold futures are slumping $11.40 to $1,867.80 an ounce.
On the currency front, the U.S. dollar is trading at 104.29 yen versus the 104.32 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.1711 compared to yesterday’s $1.1746.
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