Stocks May See Further Downside After Yesterday's Pullback - U.S. Commentary

(RTTNews) - Following the pullback seen in the previous session, stocks may see some further downside in early trading on Thursday. The major index futures are currently pointing to a lower open for the markets, with the Dow futures down by 72 points.

The downward momentum on Wall Street comes as the price of crude oil is seeing continued weakness following the steep drop seen on Wednesday.

Crude oil for February delivery is sliding $0.28 to $36.32 a barrel after tumbling $1.27 to $36.60 a barrel in the previous session.

Negative sentiment may also be generated by a report from the Labor Department showing a bigger than expected increase in initial jobless claims in the week ended December 26th.

The report said initial jobless claims climbed to 287,000, an increase of 20,000 from the previous week's unrevised level of 267,000. Economists had expected jobless claims to edge up to 270,000.

Shortly after the start of trading, MNI Indicators is scheduled to release a separate report on Chicago-area business activity in the month of December.

The Chicago Business Barometer is expected to climb to 50.0 in December from 48.7 in November, with 50 marking the dividing line between contraction and expansion.

Nonetheless, overall trading activity may be relatively subdued, as many traders are likely to be away from their desks on New Year's Eve.

The performance on the day will still determine whether the major averages manage to close higher for the year.

As of the close of trading on Wednesday, the S&P 500 was up by 0.2 percent for 2015, while the Dow was down by 1.2 percent. The tech-heavy Nasdaq has surged up by nearly 7 percent on the year.

After ending Tuesday's trading notably higher, stocks gave back some ground over the course of the trading session on Wednesday. The pullback on the day came amid the steep drop by the price of crude oil.

The major averages saw further downside going into the close, ending the day firmly in the red. The Dow fell 117.11 points or 0.7 percent to 17,603.87, the Nasdaq slid 42.09 points or 0.8 percent to 5,065.85 and the S&P 500 dropped 15.00 points or 0.7 percent to 2,063.36.

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance on Thursday, although the Japanese markets were closed on the day. Hong Kong's Hang Seng Index edged up by 0.2 percent, while Australia's All Ordinaries Index dipped by 0.4 percent.

Meanwhile, the major European markets have moved to the downside, with the German markets closed for a holiday. While the U.K.'s FTSE 100 Index has fallen by 0.5 percent, the French CAC 40 Index is down by 0.9 percent.

In commodities trading, an ounce of gold is currently trading at $1,061.30, up $1.50 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.