(RTTNews) – Stocks may move to the upside in early trading on Thursday, extending the rebound seen in the previous session. The major index futures are currently pointing to a higher open for the markets, with the S&P 500 futures up by 0.5 percent.
Early buying interest may be generated in reaction to a pullback by treasury yields, which are giving back ground after trending higher over the past several sessions.
The yield on the benchmark ten-year note is falling by more than 6 basis points after ending yesterday’s trading unchanged at its highest closing level in well over a year.
Treasury yields saw further downside following the release of a batch of U.S. economic data, including a Labor Department report showing a slight uptick in first-time claims for U.S. unemployment benefits in the week ended August 29th.
The report said initial jobless claims edged up to 206,000, an increase of 2,000 from the previous week’s revised level of 204,000.
Economists had expected jobless claims to inch up to 205,000 from the 203,000 originally reported for the previous week.
However, overall trading activity may be somewhat subdued ahead of the release of the Labor Department’s more closely watched monthly employment report on Friday.
Economists currently expect employment to climb by 55,000 jobs in August after dipping by 23,000 jobs in July, while the unemployment rate is expected to tick up to 4.2 percent from 4.1 percent.
The data could have a significant impact on the outlook for interest rates ahead of the Federal Reserve’s next monetary policy meeting later this month.
“Weaker labor-market figures could strengthen the argument for patience, while resilience in employment alongside sticky inflation would make the hawkish case increasingly difficult to dismiss,” said Daniela Hathorn, Senior Market Analyst at Capital.com.
She added, “Investors have been remarkably resilient so far, but that resilience is likely to be tested if oil, yields and expectations for Fed tightening begin moving higher simultaneously.”
Shortly after the start of trading, the Institute for Supply Management is due to release its report on service sector activity in the month of August. The services PMI is expected to inch up to 54.3 in August from 54.1 in July, with a reading above 50 indicating growth.
Stocks moved mostly higher during trading on Wednesday, regaining ground following the pullback seen over the three previous sessions. The major averages all moved back to the upside, although buying interest appeared somewhat subdued.
The major averages all finished the day firmly in positive territory. The Dow climbed 295.07 points or 0.6 percent to 53,061.95, the Nasdaq rose 118.05 points or 0.5 percent to 26,217.82 and the S&P 500 increased 35.13 points or 0.5 percent to 7,666.60.
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance on Thursday. Japan’s Nikkei 225 Index dipped by 0.2 percent, while China’s Shanghai Composite Index closed marginally higher and Australia’s S&P/ASX 200 Index rose by 0.5 percent.
The major European markets have also turned mixed on the day. While the French CAC 40 Index is down by 0.4 percent, the German DAX Index is up by 0.1 percent and the U.K.’s FTSE 100 Index is up by 0.6 percent.
In commodities trading, crude oil futures are jumping $1.30 to $92.31 a barrel after climbing $0.79 to $91.01 a barrel on Wednesday. Meanwhile, after rising $18.20 to $4,414.60 an ounce in the previous session, gold futures are surging $93.40 to $4,508 an ounce.
On the currency front, the U.S. dollar is trading at 155.55 yen versus the 158.70 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.1619 compared to yesterday’s $1.1587.
