Futures Pointing To Roughly Flat Open On Wall Street

Following the rally seen in the previous session, stocks may show a lack of direction in early trading on Thursday. The major index futures are currently pointing to a roughly flat open for the markets, with the S&P 500 futures up by less than a tenth of a percent.

Traders may be reluctant to make significant moves on the heels of the surge seen on Wednesday, which partly reflected optimism about an eventual agreement to raise the U.S. debt ceiling.

While President Joe Biden and House Speaker Kevin McCarthy, R-Calif., have both expressed optimism a deal will be reached, traders may wait for more solid signs of progress before making major bets.

Nonetheless, a positive reaction to quarterly results from Walmart (WMT) may generate some buying interest, with the retail giant jumping by 1.7 percent in pre-market trading.

The advance by Walmart comes after the company reported better than expected first quarter results and raised its full-year guidance.

On the U.S. economic front, the Labor Department released a report showing first-time claims for U.S. unemployment benefits fell by more than expected in the week ended May 13th.

The report said initial jobless claims slid to 242,000, a decrease of 22,000 from the previous week’s unrevised level of 264,000. Economists had expected jobless claims to dip to 254,000.

The bigger than expected drop came after jobless claims reached their highest level since the week ended October 30, 2021 in the previous week.

A separate report released by the Federal Reserve Bank of Philadelphia showed a continued contraction in regional manufacturing in the month of May, although the pace of contraction slowed by more than expected.

The Philly Fed said its diffusion index for current activity surged to a negative 10.4 in May from a negative 31.3 in April.

While a negative reading still indicates a contraction in regional manufacturing activity, economists had expected the index to show a more modest recovery to a negative 19.8.

The bigger than expected rebound came after the Philly Fed Index dropped to its lowest level since May 2020 in the previous month.

Shortly after the start of trading, The National Association of Realtors is scheduled to release its report on existing home sales in the month of April. Economists expect existing home sales to inch up by 0.1 percent in April after tumbling by 2.4 percent in March.

The Conference Board is also due to release its report on leading economic indicators in the month of April. The leading economic index is expected to decrease by 0.6 percent in April after slumping by 1.2 percent in March.

After ending Tuesday’s session mostly lower, stocks showed a substantial move back to the upside during trading on Wednesday. The Dow bounced off its lowest closing level in over a month, while the tech-heavy Nasdaq reached a nearly nine-month closing high.

The major averages moved roughly sideways in the final hour of trading, holding on to strong gains. The Dow jumped 408.63 points or 1.2 percent to 33,420.77, the Nasdaq spiked 157.51 points or 1.3 percent to 12,500.57 and the S&P 500 surged 48.87 points or 1.2 percent to 4,158.77.

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Thursday. Japan’s Nikkei 225 Index shot up by 1.6 percent, while China’s Shanghai Composite Index rose by 0.4 percent.

The major European markets have also moved to the upside on the day. While the German DAX Index has surged by 1.5 percent, the French CAC 40 Index is up by 0.8 percent and the U.K.’s FTSE 100 Index is up by 0.5 percent.

In commodities trading, crude oil futures are falling $0.31 to $72.58 a barrel after surging $2.05 to $72.89 a barrel on Wednesday. Meanwhile, after falling $8.10 to $1,984.90 ounce in the previous session, gold futures are sliding $13.50 to $1,971.40 an ounce.

On the currency front, the U.S. dollar is trading at 138.21 yen versus the 137.68 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.0794 compared to yesterday’s $1.0840.