The major U.S. index futures are pointing to a higher opening on Thursday following the substantial volatility seen in the previous session.
The markets may benefit from bargain hunting after the tech-heavy Nasdaq ended Wednesday’s trading at its lowest closing level in well over a month.
Trading activity is likely to be somewhat subdued, however, as some traders look to get a head start on the long weekend.
Technology stocks have been key drivers of the markets in recent session and are likely to remain in focus on the day.
Stocks saw considerable volatility over the course of the trading session on Wednesday following the sell-off seen Tuesday afternoon. The major averages spent the day showing wild swings back and forth across the unchanged line.
The major averages eventually all closed in negative territory, with the tech-heavy Nasdaq once again underperforming its counterparts.
While the Nasdaq slid 59.58 points or 0.9 percent to 6,949.23, the S&P 500 fell 7.62 points or 0.3 percent to 2,605.00 and the Dow edged down 9.29 points or less than a tenth of a percent to 23,848.42.
The volatility on Wall Street extends a recent trend, as the pullback seen in the previous session came on the heels of the substantial rebound seen on Monday.
A notable decline by Amazon (AMZN) weighed on the tech-heavy Nasdaq after a report from Axios said President Donald Trump wants to “go after” the online retailer.
Sources who’ve discussed the issue with Trump told Axios the president has talked about changing Amazon’s tax treatment because he’s worried about mom-and-pop retailers being put out of business.
Meanwhile, traders largely shrugged off a Commerce Department report showing stronger than previously estimated economic growth in the fourth quarter of 2017.
The report said gross domestic product climbed by 2.9 percent in the fourth quarter, reflecting an upward revision from the previously estimated 2.5 percent increase. Economists had expected the pace of GDP growth to be upwardly revised to 2.7 percent.
With the upward revision, the GDP growth in the fourth quarter reflects only a modest slowdown from the 3.2 percent jump in the third quarter.
The report paints a positive picture of the economy in the final three months of last year, although the data was likely viewed as old news.
A separate report from the National Association of Realtors showed a bigger than expected rebound in pending home sales in the month of February.
NAR said its pending home sales index jumped by 3.1 percent to 107.5 in February after plunging by 5 percent to a downwardly revised 104.3 in January. Economists had expected pending sales to climb by 2.1 percent.
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.
Oil service stocks showed a significant move to the downside on the day, dragging the Philadelphia Oil Service Index down by 2.1 percent. The index ended the session at its lowest closing level in well over three months.
The weakness among oil service stocks comes amid a decrease by the price of crude oil following the release of a report showing an unexpected weekly increase in oil inventories.
Considerable weakness was also visible among semiconductor stocks, which extended the sell-off seen in the previous session. The Philadelphia Semiconductor Index slumped by 2.1 percent to a one-month closing low.
Gold stocks also moved sharply lower amid another steep drop by the price of the precious metal, with the NYSE Arca Gold Bugs Index falling by 2 percent.
Chemical and retail stocks also saw notable weakness on the day, while tobacco, real estate, and pharmaceutical stocks showed strong moves to the upside.
Commodity, Currency Markets
Crude oil futures are slipping $0.08 to $64.30 a barrel after sliding $0.87 to $64.38 a barrel on Wednesday. Meanwhile, an ounce of gold is trading at $1,327.30, down $2.70 compared to the previous session’s close of $1,333. On Wednesday, gold plunged $17.90.
On the currency front, the U.S. dollar is trading at 106.54 yen compared to the 106.85 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is unchanged at $1.2308.
Asian stocks turned in a mixed performance on Thursday as lower commodity prices and a continued sell-off in technology shares kept investors nervous ahead of Easter holidays.
Chinese stocks ended higher as property developers surged after a recent correction. The benchmark Shanghai Composite Index rallied 38.64 points or 1.2 percent to close at 3,160.93, while Hong Kong’s Hang Seng Index edged up 70.85 points or 0.2 percent to 30,093.38.
Japanese shares rose as the yen weakened amid easing tensions over North Korea’s nuclear program and a report showed Japanese retail shares ticked higher in February, suggesting growing consumer confidence.
The Nikkei 225 Index rose 127.77 points or 0.6 percent to 21,159.08, while the broader Topix Index closed 0.3 percent higher at 1,704.
Fast Retailing, Yaskawa Electric, Trend Micro, Asahi Glass and Nichirei Corp jumped 3-4 percent. Meanwhile, Panasonic tumbled 4 percent and Sony declined 1.2 percent despite a weaker yen. Tech stocks such as Advantest and Tokyo Electron lost 1-2 percent.
Softbank fell 1.5 percent on a Bloomberg report that it is nearing an agreement to acquire a stake in Swiss Re. Takeda Pharmaceutical slumped 7.5 percent after the company said that it is at a preliminary and exploratory stage regarding a possible bid for U.K.-based biopharmaceutical company Shire plc.
Australian shares closed lower despite banks seeing a rebound from recent losses. The benchmark S&P/ASX 200 Index dropped 30.10 points or 0.5 percent to 5,759.40 on the final session before the Easter break, while the broader All Ordinaries Index ended down 30.30 points or 0.5 percent at 5,868.90.
Telco Telstra fell 1.3 percent to extend recent losses, and miners BHP Billiton, Rio Tinto and Fortescue Metals Group dropped between 0.9 percent and 1.6 percent.
Santos, Oil Search and Origin Energy lost 1-2 percent after crude oil prices declined more than 1 percent overnight.
On the other hand, banks Commonwealth, NAB and Westpac ended up between 0.1 percent and 0.6 percent ahead of the RBA’s monetary policy meeting due next week.
European stocks are mostly higher on Thursday as the easing of geopolitical and trade tensions prompted investors to cherry-pick shares ahead of the Easter break.
While the U.K.’s FTSE 100 Index has risen by 0.3 percent, the French CAC 40 Index is up by 0.7 percent and the German DAX Index is up by 0.9 percent.
French automaker Renault has jumped on a Bloomberg report that it is in talks to merge with Japan’s Nissan Motor. Rivals Peugeot, BMW, Daimler and Volkswagen have also moved higher.
Swiss Re has rallied on a Bloomberg report that Japan’s Softbank Corp. is nearing an agreement to acquire a stake in the reinsurance company.
Meanwhile, Shire has fallen a day after Japan’s Takeda Pharma said it is considering a possible offer for the Irish drug maker. French outsourcing group Sodexo has also slumped after cutting its guidance for fiscal 2018.
On the data front, German unemployment decreased notably in March, while U.K. consumer sentiment strengthened to the highest level in ten months in the month, separate reports showed.
ONS’ third estimate of growth showed U.K. GDP grew by 0.4 percent in the final quarter of 2017, unchanged from the second reading in February. The annual growth has been revised up to 1.8 percent from a previous reading of 1.7 percent.
U.S. Economic Reports
First-time claims for U.S. unemployment benefits unexpectedly edged lower in the week ended March 24th, according to a report released by the Labor Department.
The report said initial jobless claims dipped to 215,000, a decrease of 12,000 from the previous week’s revised level of 227,000.
Economists had expected jobless claims to inch up to 230,000 from the 229,000 originally reported for the previous week.
With the unexpected decrease, initial jobless claims fell to their lowest level since hitting 214,000 in January of 1973.
A separate report from the Commerce Department showed personal income and spending both increased in line with economist estimates in the month of February.
The report said personal income climbed by 0.4 percent in February, matching the increases seen in the two previous months as well as expectations.
The Commerce Department also said personal spending rose by 0.2 percent for the second consecutive month. The uptick in spending also matched estimates.
At 9:45 am ET, MNI Indicators is scheduled to release its report on Chicago-area business activity in the month of March.
The Chicago business barometer is expected to inch up to 62.0 in March from 61.9 in February, with a reading above 50 indicating growth.
The University of Michigan is scheduled to release its revised report on consumer sentiment in the month of March at 10 am ET.
The consumer sentiment index for March is expected to be unrevised from the preliminary reading of 102.0, which was up from 99.7 in February.
At 1 pm ET, Philadelphia Federal Reserve President Patrick Harker is due to discuss the economic outlook at a New York Association of Business Economics luncheon in New York City.
Stocks In Focus
Shares of Verint Systems (VRNT) are moving significantly higher in pre-market trading after the customer engagement and security software company reported better than expected fiscal fourth quarter results and raised its full-year guidance.
Apparel maker PVH Corp. (PVH) is also likely to see early strength after reporting fiscal fourth quarter results that exceeded estimates and providing upbeat guidance for the current year.
On the other hand, shares of GameStop (GME) may move to the downside after the video game retailer reported fiscal fourth quarter results that beat estimates but provided a disappointing revenue forecast.
Coffee chain Starbucks (SBUX) could also see early weakness after Wedbush downgraded its rating on the company’s stock to Neutral from Outperform.
by RTTNews Staff Writer
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