U.S. Stocks May See Initial Weakness On Record Nosedive By GDP
Stocks are likely to move to the downside in early trading on Thursday, extending the see-saw performance seen over the past few sessions. The major index futures are currently pointing to a lower open for the markets, with the Dow futures down by 231 points.
Negative sentiment may be generated in reaction to a report from the Commerce Department showing a record contraction in U.S. economic activity in the second quarter.
The report said real gross domestic product plummeted at an annual rate of 32.9 percent in the second quarter following a 5.0 percent slump in the first quarter.
While GDP showed the biggest quarterly drop on record, the plunge was not quite as steep as the 34.1 percent nosedive expected by economists.
Meanwhile, a separate report from the Labor Department showed initial jobless claims increased for the second straight week in the week ended July 25th, although claims rose by much less than expected.
The report said initial jobless claims edged up to 1.434 million, an increase of 12,000 from the previous week's revised level of 1,422,000.
Economists had expected jobless claims to rise to 1.450 million from the 1.416 million originally reported for the previous week.
Despite the downward momentum for the broader markets, some individual stocks are seeing significant pre-market strength on upbeat earnings
Shares of Qualcomm (QCOM) are moving sharply higher in pre-market trading after the chipmaker reported better than expected fiscal third quarter results and provided upbeat guidance
Delivery giant UPS (UPS) is also likely to see initial strength after reporting second quarter results that exceeded analyst estimates on both the top and bottom lines.
On the other hand, shares of Eli Lilly (LLY) may move to the downside after the drugmaker reported second quarter earnings that beat estimates but on weaker than expected revenues.
Tech giants Apple (AAPL), Amazon (AMZN), Alphabet (GOOGL) and Facebook (FB) are among the companies due to report their quarterly results after the close of today's trading.
Stocks moved significantly higher over the course of the trading day on Wednesday, offsetting the pullback seen late in the session n Tuesday. The major averages all moved to the upside, although the Dow underperformed its counterparts.
The major averages pulled back off their highs going into the close but remained firmly positive. The Dow climbed 160.29 points or 0.6 percent to 26,539.57, while the Nasdaq surged up 140.85 points or 1.4 percent to 10,542.94 and the S&P 500 jumped 40.00 points or 1.2 percent to 3,258.44.
In overseas trading, stock markets across the Asia-Pacific region turned in another mixed performance during trading on Thursday. Japan's Nikkei 225 Index fell by 0.3 percent, while Australia's S&P/ASX 200 Index advanced by 0.7 percent.
Meanwhile, the major European markets have moved sharply lower on the day. While the German DAX Index has plunged by 2.6 percent, the U.K.'s FTSE 100 Index is down by 1.8 percent and the French CAC 40 Index is down by 1.5 percent.
In commodities trading, crude oil futures are sliding $0.65 to $40.62 a barrel after rising $0.23 to $41.27 a barrel on Wednesday. Meanwhile, after climbing $8.80 to $1,953.40 an ounce in the previous session, gold futures are slumping $10.70 to $1,942.70 an ounce.
On the currency front, the U.S. dollar is trading at 105.17 yen versus the 104.92 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.1756 compared to yesterday's $1.1792.
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