Stocks May Regain Ground Following Recent Weakness - U.S. Commentary

(RTTNews) - After ending the previous session notably lower, stocks may regain some ground 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 102 points.

Bargain hunting may contribute to some early strength on Wall Street, as traders will likely look to pick up stocks at reduced levels following recent weakness.

The pullback seen in the previous session dragged the major averages down to their lowest closing levels in well over a year.

Traders also seem to have reacted positively to the European Central Bank's decision to leave interest rates unchanged.

On the U.S. economic front, the Labor Department recently released a report showing an unexpected increase in initial jobless claims in the week ended January 16th.

The report said initial jobless claims climbed to 293,000, an increase of 10,000 from the previous week's revised level of 283,000.

The increase came as a surprise to economists, who had expected jobless claims to drop to 275,000 from the 284,000 originally reported for the previous week.

With the unexpected increase, jobless claims rose to their highest level since reaching 296,000 in the week ended July 4th.

A separate report from the Federal Reserve Bank of Philadelphia showed that manufacturing conditions in the Philadelphia region contracted modestly in January.

The Philly Fed said its diffusion index for current activity increased to a negative 3.5 in January from a negative 10.2 in December, although a negative reading indicates a contraction in regional manufacturing activity. Economists had expected the index to rise to a negative 4.0.

Extending a recent downward trend, stocks saw substantial weakness during trading on Wednesday. With the weakness on the day, the major averages fell to their lowest closing levels since 2014.

The major averages climbed of their lows for the session but still ended the day in the red. The Dow tumbled 249.28 points or 1.6 percent to 15,766.74, the Nasdaq edged down 5.26 points or 0.1 percent to 4,471.69 and the S&P 500 dropped 22.00 points or 1.2 percent to 1,859.33.

In overseas trading, most stock markets across the Asia-Pacific region saw considerable weakness during trading on Thursday. Japan's Nikkei 225 Index plunged by 2.4 percent, while Hong Kong's Hang Seng Index slumped by 1.8 percent.

Meanwhile, the major European markets have moved to the upside on the day. While the U.K.'s FTSE 100 Index has surged up by 1.6 percent, the German DAX Index and the French CAC 40 Index are up by 2.2 percent and 2.3 percent, respectively.

In commodities trading, crude oil futures for March delivery are slipping $0.18 to $28.17 a barrel after tumbling $1.22 to $28.35 a barrel on Wednesday. An ounce of gold is trading at $1,095.60, down $10.60 from the previous session's close of $1,106.20. On Wednesday, gold rallied $17.10.

On the currency front, the U.S. dollar is trading at 117.28 yen compared to the 116.94 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.0802 compared to yesterday's $1.0890.