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

Stocks may experience choppy trading in the early going on Thursday, extending the relatively lackluster performance seen over the past two sessions. The major index futures are currently pointing to a mixed open, with the Dow futures up by 130 points but the Nasdaq 100 futures down by 57 points.

Traders may remain reluctant to make significant moves as they continue to look ahead to a closely watched reading on inflation on Friday.

The reading on inflation included in the Commerce Department’s report on personal income and spending is said to be preferred by the Federal Reserve and could have a significant impact on the outlook for monetary policy.

Traders are also digesting a report from the Labor Department showing first-time claims for U.S. unemployment benefits fell by more than expected in the week ended May 22nd and once again hit their lowest level in over a year.

The Labor Department said initial jobless claims slid to 406,000, a decrease of 38,000 from the previous week’s unrevised level of 444,000. Economists had expected jobless claims to dip to 425,000.

The continued decrease in jobless claims paints a positive picture of the labor market but may also raise concerns that the Fed will move closer to tapering its asset purchases in the near future.

While a separate report from the Commerce Department showed an unexpected pullback in durable goods orders in April, the decrease was largely due to a steep drop in orders for transportation equipment.

The report showed durable goods orders tumbled by 1.3 percent in April after jumping by an upwardly revised 1.3 percent in March.

The pullback surprised economists, who had expected durable goods orders to climb by 0.7 percent compared to the 0.8 percent increase that had been reported for the previous month.

Excluding a 6.7 percent slump in orders for transportation equipment, however, durable goods orders shot up by 1.0 percent in April after spiking by 3.2 percent in March. Economists had expected 0.8 percent growth.

The Commerce Department released a separate report showing the pace of U.S. economic growth in the first quarter was unrevised from the advance estimate.

The report showed real gross domestic product spiked by 6.4 percent in the first quarter, unchanged from the estimate provided last month. Economists had expected a modest upward revision in the pace of GDP growth to 6.5 percent.

Shortly after the start of trading, the National Association of Realtors is scheduled to release its report on pending home sales in the month of April. Pending home sales are expected to increase by 0.8 percent.

Stocks moved mostly higher over the course of the trading day on Wednesday, partly offsetting the modest weakness seen on Tuesday. The major averages all closed in positive territory, although the tech-heavy Nasdaq outperformed its counterparts.

After ending Tuesday’s trading marginally lower, the Nasdaq climbed 80.82 points or 0.6 percent to 13,738.00. The S&P 500 also edged up 7.86 points or 0.2 percent to 4,195.99, while the narrower Dow inched up 10.59 points or less than a tenth of a percent to 34,323.05.

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Thursday. Japan’s Nikkei 225 Index fell by 0.3 percent, while China’s Shanghai Composite Index rose by 0.4 percent.

The major European markets have also turned mixed on the day. While the French CAC 40 Index has advanced by 0.8 percent, the U.K.’s FTSE 100 Index and the German DAX Index are both down by 0.2 percent.

In commodities trading, crude oil futures are sliding $0.48 to $65.73 a barrel after inching up $0.14 to $66.21 a barrel on Wednesday. Meanwhile, after rising $3.20 to $1,901.20 an ounce in the previous session, gold futures are falling $4 to $1,897.20 an ounce.

On the currency front, the U.S. dollar is trading at 109.34 yen versus the 109.15 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is unchanged compared to yesterday’s $1.2192.