U.S. Stocks May Lack Direction Following Recent Volatility

Stocks may show a lack of direction in early trading on Thursday following the volatility seen over the past few sessions. The major index futures are currently pointing to a roughly flat open for the markets, with the Dow futures up by just 10 points.

Traders may be reluctant to make significant moves early on as they digest recent swings by stocks and the roller coaster ride by oil prices.

Crude oil prices are currently extending the rally seen in the previous session after the front-month contract turned negative for the first time in history earlier this week.

Early trading may also be impacted by reaction to the Labor Department’s report on initial jobless claims in the week ended April 18th.

The report showed more than 4 million people filed first-time claims for U.S. unemployment benefits last week, although that reflects a continued decline from the nearly 7 million people that filed first-time claims in the last week of March.

The Labor Department said initial jobless claims dropped to 4.427 million, a decrease of 810,000 from the previous week’s revised level of 5.237 million.

Economists had expected jobless claims to slump to 4.200 million from the 5.245 million originally reported for the previous week.

Jobless claims remain at a substantially elevated level due to the coronavirus-induced economic shutdown but have slid steadily since reaching a record high of 6.867 million in the week ended March 28th.

Shortly after the start of trading, the Commerce Department is scheduled to release its report on new home sales in the month of March.

Economists expect new home sales to nosedive by 15.7 percent to an annual rate of 645,000 in March after slumping by 4.4 percent to a rate of 765,000 in February.

Stocks moved sharply higher over the course of the trading day on Wednesday, partly offsetting the steep drop seen earlier this week. The major averages all showed significant moves to the upside on the day.

The major averages pulled back off their highs going into the close but still posted strong gains. The Dow jumped 456.94 points or 2 percent to 23,475.82, the Nasdaq spiked 232.15 points or 2.8 percent to 8,495.38 and the S&P 500 surged up 62.75 points or 2.3 percent to 2,799.31.

In overseas trading, stock markets across the Asia-Pacific region turned in another mixed performance during trading on Thursday. Japan’s Nikkei 225 Index jumped by 1.5 percent, while China’s Shanghai Composite Index dipped by 0.2 percent.

The major European markets have also turned mixed on the day. While the German DAX Index is down by 0.1 percent, the U.K.’s FTSE 100 Index is up by 0.1 percent and the French CAC 40 Index is up by 0.4 percent.

In commodities trading, crude oil futures are soaring $2.50 to $16.28 a barrel after spiking $2.21 to $13.78 a barrel on Wednesday. Meanwhile, after skyrocketing $50.50 to $1,738.30 ounce in the previous session, gold futures are climbing $7.70 to $1,746 an ounce.

On the currency front, the U.S. dollar is trading at 107.45 yen compared to the 107.75 it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.0790 compared to yesterday’s $1.0823.

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