RTTNews - After falling sharply in the previous session, stocks are likely to see some further downside in early trading on Thursday. The major index futures are currently indicating a moderately lower open, with the Dow futures currently down 30 points.
The downward momentum for the markets comes following the release of a report showing a much bigger than expected increase in initial jobless claims in the week ended May 9th, with the data raising further concerns about the economic outlook.
The Labor Department said initial jobless claims rose to 637,000 from the previous week's revised figure of 605,000. Economists had been expecting jobless claims to edge up to 610,000 from the 601,000 originally reported for the previous month.
Additionally, the report showed a continued increase in continuing claims, which rose to another new record high of 6.560 million in the week ended May 2nd from the preceding week's revised level of 6.358 million. The continued increase in continuing claims reflects an ongoing hiring freeze.
In other economic news, producer prices increased by a little more than expected in the month of April, according to a separate report released by the Labor Department, with the increase in prices partly due to a rebound in food prices.
The report showed that the producer price index rose 0.3 percent in April following an unrevised 1.2 percent decrease in March. Economists had been expecting a slightly more modest increase in prices of about 0.2 percent.
At the same time, the Labor Department said that the core producer price index, which excludes food and energy prices, edged up 0.1 percent in April after coming in unchanged in the previous month. The modest increase came in line with economist estimates.
On the earnings front, Wal-Mart (WMT) reported first-quarter net income of $3.022 billion or $0.77 per share, compared to $3.022 billion or $0.76 per share in the same quarter of last year. The earnings came in-line with expectations, which called for the firm to report earnings of $0.77 per share.
Wal-Mart said its net sales for the first quarter were $93.471 billion, a decrease of 0.6 percent from $94.042 billion in the first quarter of last year.
Meanwhile, Sony (SNE) reported a fourth quarter net loss of $1.68 billion or $1.68 per share, on revenue of $15.55 billion. Sales and operating revenues dropped 22 percent. Shares of Sony have moved lower in pre-market trading following the earnings news.
In other news, American International Group (AIG) plans to spin off its Asian life insurance unit in a $5 to $10 billion Hong Kong initial public offering, the Wall Street Journal reported, citing a person familiar with the situation.
The Journal also reported that a group of 18 U.S. and foreign financial institutions and affiliates, including Bank of America (BAC), JPMorgan Chase (JPM), and UBS (UBS), have sued bond insurer MBIA, Inc. (MBI) over the fraudulent splitting of its guarantee business into two under restructuring in February.
Stocks saw substantial weakness during trading on Wednesday, as disappointing retail sales offset some of the recent optimism about the outlook for the economy. The major averages all moved sharply lower after ending the previous session mixed.
The weakness in the markets came after a report from the Commerce Department showed that retail sales unexpectedly fell for the second consecutive month in April after showing back-to-back increases in the first two months of the year.
The major averages all closed firmly negative, with the Nasdaq ending the session at its worst level of the day. The Dow fell 184.22 points or 2.2 percent to 8,284.89, the Nasdaq closed down 51.73 points or 3 percent at 1,664.19 and the S&P 500 fell 24.43 points or 2.7 percent to 883.92.
In early commodities trading, crude oil futures are down $1.05 at $56.97 a barrel following a decrease on Wednesday, when oil slipped $0.83 to $58.02 a barrel. Meanwhile, gold futures are currently down $4.20 at $921.70 an ounce after ending the previous session up $2 to $925.90 an ounce.
On the currency front, the U.S. dollar has inched higher against the euro, moving to $1.357 after hitting $1.3722 on Wednesday, its lowest level since mid-March. Meanwhile, the dollar is currently trading at 95.479 yen after the greenback weakened significantly to 95.3005 yen in the previous session
In overseas trading, stock markets across the Asia-Pacific region finished mostly lower. Japan's benchmark Nikkei 225 Index dipped 2.6 percent, while Hong Kong's Hang Seng Index fell 3.0 percent.
The major European markets are currently turning in a mixed performance, with the U.K.'s FTSE 100 Index just above the unchanged line, while the French CAC 40 Index and the German DAX Index are down 0.7 percent and 0.8 percent, respectively.
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