News Column

Stocks May Open Higher Following Upbeat Jobs Data - US Commentary

August 7, 2014

WASHINGTON (Alliance News) - After ending the previous session nearly flat, stocks are likely to move to the upside in early trading on Thursday. The major index futures are currently pointing to a higher open for the markets, with the Dow futures up by 41 points.

The futures saw continued strength following the release of a report from the Labor Department showing an unexpected decrease in initial jobless claims in the week ended August 2nd.

The Labor Department said initial jobless claims fell to 289,000, a decrease of 14,000 from the previous week's revised level of 303,000.

The drop came as a surprise to economists, who had expected jobless claims to edge up to 305,000 from the 302,000 originally reported for the previous week.

The data provides another positive sign for the labor market but may also fuel further speculation about the Federal Reserve raising interest sooner than anticipated.

Peter Boockvar, chief market analyst at the Lindsey Group, said, "Bottom line, the trend lower in the pace of firings continues, which is a definite plus for the labor market."

"For the Fed, today's data point is another figure pointing out how far behind the reality of the data they are falling," he added.

Traders are also keeping an eye on developments overseas, where the European Central Bank kept interest rates unchanged as expected.

ECB President Mario Draghi noted that available information remains consistent with the bank's assessment of a continued moderate and uneven recovery of the euro area economy.

However, Draghi acknowledged that the dispute with Russia over its involvement in the conflict in Ukraine could hurt growth.

Russian President Vladimir Putin signed an executive order Wednesday instituting a one-year ban on certain food and agricultural products from countries that have issued sanctions against Russia.

Stocks fluctuated over the course of the trading day on Wednesday before ending the session nearly flat. Relatively light trading activity may have contributed to the volatility on Wall Street as some traders enjoy time away from their desks.

The major averages ended the day near the unchanged line, with the S&P 500 inching up just 0.03 points to 1,920.24. The Dow edged up 13.87 points or 0.1% to 16,443.34 and the Nasdaq crept up 2.22 points or 0.1% to 4,355.05.

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower on Thursday. Hong Kong'sHang Seng Index dropped by 0.8%, while Australia's All Ordinaries Index edged down by 0.1%. However, Japan'sNikkei 225 Index bucked the downtrend and rose by 0.5%.

Meanwhile, the major European markets are turning in a mixed performance on the day. While the German DAX Index is up by 0.1%, the UK'sFTSE 100 Index is just below the unchanged line and the French CAC 40 Index is down by 0.3%.

In commodities trading, crude oil futures are climbing USD0.34 to USD97.26 a barrel after receding USD0.46 to USD96.92 a barrel on Wednesday. Gold futures, which rallied USD22.90 to USD1,308.20 an ounce in the previous session, are slipping USD1.40 to USD1,306.80 an ounce.

On the currency front, the US dollar is trading at 102.28 yen compared to the 102.10 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at USD1.3390 compared to yesterday's USD1.3383.

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Source: Alliance News

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