Futures Pull Back Near Unchanged Line After Inflation Data

Following the substantial turnaround seen over the course of 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.

The futures had been pointing to a higher open for the markets but gave back ground following the release of a Labor Department report showing producer prices in the U.S. rose by slightly more than expected in the month of August.

The Labor Department said its producer price index for final demand crept up by 0.2 percent in August, while revised data showed prices were unchanged in July.

Economists had expected producer prices to inch up by 0.1 percent, matching the uptick originally reported for the previous month.

Following yesterday’s report showing a slightly bigger than expected increase by core consumer prices, the data is likely to further reduce expectations for aggressive interest rate cuts by the Federal Reserve

At the same time, the report said the annual rate of producer price growth slowed to 1.7 percent in August from a downwardly revised 2.1 percent in July.

The year-over-year increase by producer prices was expected to decelerate to 1.8 percent from the 2.2 percent originally reported for the previous month.

The Labor Department also released a separate report showing a modest increase by first-time claims for U.S. unemployment benefits in the week ended September 7th.

The report said initial jobless claims rose to 230,000, an increase of 2,000 from the previous week’s revised level of 228,000.

Economists had expected jobless claims to inch up to 230,000 from the 227,000 originally reported for the previous week.

Stocks moved sharply lower early in the session on Wednesday but showed a substantial turnaround over the course of the trading day. The tech-heavy Nasdaq led the recovery, with all of the major averages ending the day in positive territory.

After tumbling by as much as 1.4 percent in early trading, the Nasdaq surged 369.65 points or 2.2 percent to 17,395.53. The S&P 500 also jumped 58.61 points or 1.1 percent to 5,554.13, while the Dow rose 124.75 points or 0.3 percent to 40,861.71 after hitting its lowest intraday level in almost a month.

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Thursday. Japan’s Nikkei 225 Index soared by 3.4 percent, while Hong Kong’s Hang Index climbed by 0.8 percent.

The major European markets have also moved to the upside on the day. While the German DAX Index is up by 1.2 percent, the French CAC 40 Index is up by 1.0 percent and the U.K.’s FTSE 100 Index is up by 0.9 percent.

In commodities trading, crude oil futures are climbing $0.73 to $68.04 a barrel after jumping $1.56 to $67.31 a barrel on Wednesday. Meanwhile, after edging down $0.70 to $2,542.40 an ounce in the previous session, gold futures are rising $10.90 to $2,553.30 an ounce.

On the currency front, the U.S. dollar is trading at 142.05 yen versus the 142.36 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.1027 compared to yesterday’s $1.1012.