Stocks may move to the downside in early trading on Thursday, giving back ground following the rally seen over the course of the previous session. The major index futures are currently pointing to a modestly lower open for the markets, with the S&P 500 futures down by 0.2 percent.
Profit taking may contribute to initial weakness on Wall Street, as the surge seen in the previous session lifted the Dow and S&P 500 to their best closing levels in well over a month even as the Federal Reserve announced another significant increase in interest rates.
A sharp pullback by shares of Meta Platforms (META) may also weigh on the markets, with the parent of Facebook and Instagram tumbling by 4.1 percent in pre-market trading.
The steep drop by Meta comes after the company reported weaker than expected second quarter results, including its first ever year-over-year drop in revenues.
The downward momentum on Wall Street also comes after the Commerce Department released a report showing a continued contraction in U.S. economic activity in the second quarter of 2022.
The Commerce Department said real gross domestic product decreased by 0.9 percent in the second quarter after slumping by 1.6 percent in the first quarter. Economists had expected GDP to increase by 0.5 percent.
With GDP unexpectedly declining for the second consecutive quarter, the data signals the U.S. economy is in a technical recession.
The drop in GDP in the second quarter reflected decreases in private inventory investment, residential fixed investment, government spending and nonresidential fixed investment.
Meanwhile, a separate report from the Labor Department showed a modest pullback in initial jobless claims in the week ended July 23rd.
The report showed initial jobless claims edged down to 256,000, a decrease of 5,000 from the previous week’s revised level of 261,000.
Economists had expected jobless claims to inch up to 253,000 from the 251,000 originally reported for the previous week.
Following the sell-off seen during Tuesday’s session, stocks showed a substantial move back to the upside during trading on Wednesday. The major averages more than offset Tuesday’s losses, with the Dow and the S&P 500 reaching their best closing levels in well over a month.
The major averages pulled back off their intraday highs going into the close but held on strong gains. While the Nasdaq spiked 469.85 points or 4.1 percent to 12,032.42, the S&P 500 surged 102.56 points or 2.6 percent to 4,023.61 and the Dow jumped 436.05 points or 1.4 percent at 32,197.59.
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Thursday. Japan’s Nikkei 225 Index rose by 0.4 percent, while China’s Shanghai Composite Index edged up by 0.2 percent.
Meanwhile, the major European markets are turning in a mixed performance on the day. While the French CAC 40 Index is up by 0.3 percent, the German DAX Index is down by 0.1 percent and the U.K.’s FTSE 100 Index is down by 0.2 percent.
In commodities trading, crude oil futures are jumping $2.06 to $99.32 a barrel after surging $2.28 to $97.26 a barrel a barrel on Wednesday. Meanwhile, after inching up $1.40 to $1,719.10 an ounce in the previous session, gold futures are advancing $25.10 to $1,744.20 an ounce.
On the currency front, the U.S. dollar is trading at 134.90 yen versus the 136.57 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.0156 compared to yesterday’s $1.0200.
Business News
U.S. Stocks May Give Back Ground In Early Trading
2022-07-28 12:55:37
