More Losses Likely As Oil Slides, Jobless Claims Surge

(RTTNews) - The major U.S. index futures are pointing to a lower opening on Thursday, with futures retracing their early gains and dipping sharply following the release of a report showing a bigger than expected increase in jobless claims. After Asian stocks closed mixed, the European averages ended a truncated session lower. Oil has turned lower and is all set to end the year with losses of over 30 percent, marking the second consecutive year of declines. The domestic markets may now focus on the results of a regional manufacturing survey, although the major U.S. averages are set to end mixed for the year.

U.S. stocks retreated on Wednesday along with crude oil amid light trading activity, with weak pending home sales also impacting sentiment. The major averages opened lower and moved roughly sideways till late trading. After taking a steep leg down, the averages ended notably lower.

The Dow Industrials ended down 117.11 points or 0.66 percent at 17,604, the S&P 500 Index closed 15 points or 0.72 percent lower at 2,063 and the Nasdaq Composite lost 42.09 points or 0.82 percent before ending at 5,066.

Twenty-nine of the thirty Dow components closed lower, with Apple (AAPL), Chevron (CVX), Intel (INTC), Nike (NIKE), Visa (V) and Exxon Mobil (XOM) leading the declines.

Among the sectors, transportation, resource, semiconductor and financial stocks fell notably.

On the economic front, the National Association of Realtors reported that pending home sales unexpectedly fell 0.9 percent in November compared to expectations for a 0.5 percent increase. In October, pending home sales had risen 0.2 percent. Pending home sales climbed in the Midwest and South, while pending sales declined in the Northeast and West. However, annually, the metric was up 2.7 percent.

Currency, Commodity Markets

Crude oil futures are slipping $0.33 to $36.27 a barrel after tumbling $1.27 to $36.60 a barrel on Wednesday. The previous session's retreat came amid the release of the weekly petroleum status report, which showed that crude oil stockpiles rose by 2.6 million barrels to 487.40 million barrels in the week ended December 25th. Stockpiles are still near levels not seen for this time of year in at least the last 80 years. Distillate inventories increased by 1.8 million barrels and were in the upper half of the average range for this time of the year. Gasoline inventories rose by 0.9 million barrels and were in the middle of the average range. Refinery capacity utilization averaged 92.2 percent over the four weeks ended December 25th compared to 92.7 percent over the four weeks ended December 18th. An ounce of gold is currently trading at $1,060.50, up $0.70 from the previous session's close of $1,059.80. On Wednesday, gold fell $8.20. On the currency front, the U.S. dollar is trading at 120.36 yen compared to the 120.52 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.0891 compared to yesterday's $1.0933.

Asia

The Asian markets ended the final trading session of the year on a lackluster note, although the Japanese, Indonesian and South Korean markets remained closed for public holidays. The poor showing by Wall Street stocks overnight weighed on the markets even as commodities staged a rebound. Most markets that were open had truncated sessions.

Australia's All Ordinaries Index saw volatility in the morning session before it declined steeply. The index closed the abbreviated the session down 21.80 points or 0.41 percent at 5,345. The market witnessed broad based weakness, with energy, IT, material and real estate stocks among the worst hit.

China's Shanghai Composite Index ended a volatile session down 33.69 points or 0.94 percent at 3,539. However, Hong Kong's Hang Seng Index finished an abbreviated session 32.25 points or 0.15 percent higher at 21,914.

For the year, Japan's Nikkei 225 Index was up 9.07 percent, becoming one of the better performing global markets this year. The dollar's strength, which rendered the yen weak, an accommodative monetary policy stance and stimulus infusion largely helped the market.

Meanwhile, Hong Kong's Hang Sang Index, which has its fortunes tied to the mainland markets, slid 7.16 percent. After a stellar 2014, China's Shanghai Composite declined 8.60 percent for the year compared to a 0.82 percent drop by Australia's All Ordinaries Index.

On the economic front, a report released by the Reserve Bank of Australia showed that private sector credit in Australia rose 0.4 percent month-over-month in November compared to expectations for a 0.6 percent increase. Annually, credit climbed a smaller than expected 6.6 percent. Housing credit rose 0.6 percent compared to the previous month.

Europe

European stocks opened lower and continued to see weakness. In the absence of any major catalysts and amid light activity in a truncated session, the major averages in the region closed moderately lower. The German market is closed for a holiday.

U.S. Economic Reports

The Labor Department reported that jobless claims rose 20,000 to 287,000 in the week ended December 26th from the previous week's unrevised level of 267,000. Economists expected claims to have increased more modestly to 270,000. The four-week moving average rose to 277,000 from 272.500. Continuing claims calculated with a week's lag increased to 2.198 million in the week ended December 19th from 2.195 million in the week ended December 12th.

MNI Indicators is set to release the results of its Chicago business survey for December at 9:45 am ET. The consensus estimate calls for an increase in the business barometer to 50 from 48.7 in November.

The region's business activity entered into contraction territory in November. The business barometer fell to 48.7 in November from 56.2 in October. Economists had expected a reading of 54 for the month.

The new orders index moved back into contraction territory and the order backlogs index remained in contraction territory for the 10th straight month.

Stocks in Focus

Rite Aid (RAD) reported a 0.1 percent year-over-year decline in its same store sales for December.

Chimerix (CMRX) could see some bounce after asset management firm Point72 announced it has purchased a 5.3 percent stake in the company.

Weight Watchers (WTW) began to air a TV commercial featuring Oprah Winfrey, who picked up a 10 percent stake in the company earlier this year.