The major U.S. index futures are currently pointing to a slightly lower open on Thursday, with stocks likely to give back ground after moving mostly higher over the two previous sessions.

A slump by shares of Micron Technology (MU) may weigh on the markets, as the chipmaker is tumbling by 4.4 percent in pre-market trading.

The steep drop by Micron comes after the company reported better than expected fiscal third quarter results but provided guidance that disappointed investors.

Shares of Walgreens Boots Alliance (WBA) are also seeing significant pre-market weakness after the retail pharmacy company reported fiscal third quarter earnings that missed analyst estimates and lowered its full-year profit outlook.

Overall trading activity is likely to remain somewhat subdued, however, as traders look ahead to the release of closely watched inflation data on Friday.

U.S. stocks closed slightly higher on Wednesday after a somewhat sluggish session as investors made cautious moves while awaiting the release of the personal consumption expenditures price index report on Friday.

The major averages all closed on the positive side. Technology stocks outperformed, lifting the Nasdaq by 87.50 points or 0.5 percent, to 17,805.16. The Dow ended up by 15.64 points or less than a tenth of a percent at 39,127.80, while the S&P 500 settled at 5,477.60, gaining 8.60 points or 0.2 percent.

Bank stocks were in focus ahead of the central bank’s annual stress test. Shares of energy firms struggled a bit due to sluggish oil prices.

Amazon rallied about 4 percent, and the surge lifted the stock’s market cap past $2 trillion.

Apple Inc, Tesla Inc., Walmart, Home Depot, United Parcel Service and Boeing gained 1 to 4 percent.

Automatic Data Processing shares dropped more than 4 percent. Dell Technologies, Analog Devices, Pfizer, Morgan Stanley, Amgen, Cisco Systems, Qualcomm, Chevron, Advanced Micro Devices and Merck lost 1 to 3 percent.

On the economic front, a report released by the Commerce Department showed new home sales in the U.S. saw a substantial decrease in the month of May, plunging by 11.3 percent to an annual rate of 619,000 after jumping by 2.0 percent to a revised rate of 698,000 in April.

Economists had expected new home sales to rise to an annual rate of 640,000 from the 634,000 originally reported for the previous month.

Commodity, Currency Markets

Crude oil futures are rising $0.46 to $81.36 a barrel after inching up $0.07 to $80.90 a barrel on Wednesday. Meanwhile, after sliding $17.60 to $2,313.20 an ounce in the previous session, gold futures are climbing $18 to $2,331.20 an ounce.

On the currency front, the U.S. dollar is trading at 160.40 yen versus the 160.81 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.0713 compared to yesterday’s $1.0681.

Asia

Asian stocks declined on Thursday as Chinese industrial profits data disappointed and the yen’s slide past 160-per-dollar prompted fears of government intervention.

Tech stocks resumed declines as U.S. chipmaker Micron Technology beat estimates for third-quarter revenue but offered a somewhat middling outlook on earnings.

The U.S. dollar hit a 38-year high versus the yen and bond yields spiked due to nervousness ahead of a major U.S. presidential debate in Atlanta later in the day and the release of U.S. PCE inflation data on Friday.

Gold edged up slightly to trade above $2,300 per ounce after a two-day decline, while oil prices were marginally lower in Asian trading after data showed a large build in U.S. stockpiles.

China’s Shanghai Composite Index fell 0.9 percent to 2,945.85 after data showed a sharp slowdown in industrial profit growth in May. Hong Kong’s Hang Seng Index tumbled 2.1 percent to 17,716.47, dragged down by tech stocks.

Japanese markets drifted lower as investors remained on high alert for government intervention in the currency market.

Japanese finance minister Shunichi Suzuki reiterated today that authorities are watching the currency market closely and will take appropriate action as needed to help the exchange rate move in a stable manner.

The Nikkei 225 Index slid 0.8 percent to 39,341.54, while the broader Topix Index settled 0.3 percent lower at 2,793.70.

Technology stocks underperformed, with Tokyo Electron falling 2.4 percent and Screen Holdings losing 5.7 percent. Investors ignored data that showed Japan’s retail sales rose more than expected in May.

Seoul stocks ended lower after Micron’s earnings results. The Kospi slipped 0.3 percent to 2,784.06. Auto and shipbuilding stocks posted strong gains, helping limit losses in the broader market.

Hyundai Motor jumped 2.9 percent and HD Korea Shipbuilding & Offshore Industries surged 4.7 percent.

Australian markets ended lower as rate sensitive stocks declined on growing bets that the Reserve Bank would hike rates in August after a surprise jump in inflation to a six-month high in May.

The benchmark S&P/ASX 200 Index dropped 0.3 percent to 7,759.60, with banks and real estate stocks leading losses. The broader All Ordinaries Index ended 0.3 percent lower at 8,002.80.

Across the Tasman, New Zealand’s benchmark S&P/NZX-50 Index ended down 1.0 percent at 11,717.43, snapping a two-day winning streak as government bond yields edged higher.

Europe

European shares are turning in a mixed performance on Thursday as investors brace for the first round of French parliamentary elections due over the weekend.

Higher bond yields also weighed on markets as traders awaited the release of key U.S. inflation readings on Friday for additional clues on the Fed’s rate trajectory.

While the German DAX Index is up by 0.3 percent, the U.K.’s FTSE 100 Index is down by 0.1 percent and the French CAC 40 Index is down by 0.6 percent.

In corporate news, Swedish clothing major Hennes & Mauritz AB has plunged after posting a smaller-than-expected increase in second quarter profits.

German wind turbine manufacturer Nordex SE has also moved to the downside after an announcement that it will restart production in its manufacturing facility in Iowa, United States.

GSK has also tumbled after a U.S. public health agency narrowed its usage recommendation for all respiratory syncytial virus (RSV) vaccines.

Miners Anglo American, Antofagasta and Glencore have also fallen after new data showed growth in China’s industrial profits slowed sharply in May.
Meanwhile, Watches of Switzerland Group, a British retailer of Swiss watches and other luxury goods, has soared. The company said it is seeing signs of stability in the U.K. premium and luxury watch market following a post-COVID slump in sales.

U.S. Economic Reports

A report released by the Labor Department on Thursday showed first-time claims for U.S. unemployment benefits fell by more than expected in the week ended June 22nd.

The Labor Department said initial jobless claims dropped to 233,000, a decrease of 6,000 from the previous week’s revised level of 239,000.

Economists had expected jobless claims to edge down to 236,000 from the 238,000 originally reported for the previous week.

Meanwhile, the report said the less volatile four-week moving average rose to 236,000, an increase of 3,000 from the previous week’s revised average of 233,000.

Meanwhile, the Commerce Department released a report on Thursday showing new orders for U.S. manufactured durable goods unexpectedly crept higher in the month of May.

The report said durable goods orders inched up by 0.1 percent in May after rising by a downwardly revised 0.2 percent in April.

Economists had expected durable goods orders to slip by 0.1 percent compared to the 0.6 percent increase that had been reported for the previous month.

Excluding an increase orders for transportation equipment, durable goods orders edged down by 0.1 percent in May after climbing by 0.4 percent in April. Ex-transportation orders were expected to rise by 0.2 percent.

The U.S. economy grew by slightly more than previously estimated in the first quarter of 2024, according to a separate report released by the Commerce Department on Thursday.

The report said gross domestic product jumped by 1.4 percent in the first quarter compared to the previously estimated 1.3 percent increase. The upward revision matched economist estimates.

The GDP growth in the first quarter still reflects a notable slowdown compared to the 3.4 percent surge in the fourth quarter of 2023.

The Commerce Department said the upward revision primarily reflected a downward revision to imports, which are a subtraction in the calculation of GDP, and upward revisions to non-residential fixed investment and government spending.

At 10 am ET, the National Association of Realtors is due to release its report on pending home sales in the month of May. Pending home sales are expected to jump by 2.5 percent in May after plunging by 7.7 percent in April.

The Treasury Department is scheduled to announce the results of this month’s auction of $44 billion worth of seven-year notes at 1 pm ET.




Slump By Micron May Weigh On Wall Street

2024-06-27 12:58:38

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