Dow futures retreat ahead of weekly jobless claims report

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Dow futures retreat ahead of weekly jobless claims report


Futures contracts on U.S. stock-market indexes headed modestly lower Thursday morning as investors watched for the latest weekly update on the state of the U.S. labor market amid the COVID pandemic.

Successful vaccine rollouts, good quarterly results from corporations, and hope of a better economy in the second half of 2021 has helped to lift stocks but equity investors were finding fewer reasons to drive stocks higher as bond yields also staged a steady ascent, indicating higher borrowing costs for individuals and corporations.

How are stock benchmarks performing?
  • Futures for the Dow Jones Industrial Average
    YM00

    YMH21
    wre off 99 points, or 0.3%, to reach 31,450.

  • S&P 500 index futures
    ESH21

    ES00
    declined 18 points, or 0.5%, at 3.910.

  • Nasdaq-100 futures
    NQ00

    NQH21
    give up 113.50 points to 13,586.25, a drop of 0.8%.

On Wednesday, the Dow
DJIA
booked its third straight record close but the S&P 500
SPX
and the Nasdaq Composite
COMP
indexes finished in negative territory.

What’s driving the market?

Market participants are looking for further indications that the economy is on an improving footing, with a reading of the labor market on tap Thursday as well as data on housing, manufacturing activity and imports.

Economists surveyed by Econoday are expecting 768,000 new jobless benefit claims for the week ended Feb. 13, down from 793,000, with markets hoping to see the number of people seeking unemployment benefits receding as cases of COVID-19 decline in parts of the country and the rollout of vaccines proceeds apace.

The U.S. averaged 77,661 new cases a day in the past week, down 43% from the average two weeks ago, and so far  57.4 million Americans have been vaccinated or 17% of the population, at a rate of 1.61 million doses per day. However, the global tally for confirmed cases of the coronavirus that causes COVID-19 climbed above 109.9 million on Thursday, according to data aggregated by Johns Hopkins University, while the death toll rose above 2.43 million. 

Still, the weekly jobless benefit claims figures are likely to remain above the pre-coronavirus pandemic peak, but well below the figures during the height of the economic disruption last spring.

Thus far, the U.S. economy has been showing signs of steady, if not rapid, improvement, underscored by retail sales figures, which showed a seasonally adjusted rise of 5.3% in January from a month earlier, while data on manufacturing output has been nearing its best levels in a year.

Market participants have pointed to progress on more fiscal stimulus from Congress as one cause for optimism for stock buying on Wall Street. Washington lawmakers are still negotiating the terms of the president’s $1.9 trillion COVID aid package. The Biden administration is also next month is expected to release a plan to outline his “Build Back Better” agenda that will focus heavily on infrastructure. On Wednesday, President Joe Biden laid out some elements of his plans to labor leaders.

Meanwhile, investors were keeping one eye trained on brutal winter conditions that is causing millions of Americans to remain without power in places like Texas, as winter storms buffet much of the U.S. The weather has delivered a jolt to natural-gas prices and pushed crude-oil values to their highest levels in more than a year.

Separately, the House Financial Services Committee at noon Thursday is set to grill several of the principal actors in the GameStop saga following public outcry against online trading platform Robinhood and other brokers’ decisions to briefly restrict trading in stocks including GameStop Corp.
GME,
and AMC Entertaintment Holdings
AMC.

Looking to other U.S. economic reports, besides jobless claims at 8:30 a.m. Eastern, investors await an update of manufacturing conditions in the Federal Reserve’s Philadelphia district, a report on import-export prices and a reading of housing starts and permits.

Which stocks are in focus?
  • Walmart Inc.
    WMT
    approved a $20 million buyback program and raised its dividend by 4 cents to $2.20 a share on Thursday as it delivered its quarterly results

  • Marriott International Inc.
    MAR
    shares MAR slid in premarket trade Thursday, after the hotel operator posted a loss and weaker-than-expected revenue for the fourth quarter as the coronavirus pandemic kept travelers away.

  • Rigel Pharmaceuticals Inc. shares RIGL soared in premarket trade Thursday, after the company said it has agreed to join with Eli Lilly and Co.
    LLY
    in developing RIPK1 Inhibitors to treat immunological and neurodegenerative diseases.

  • Shares of Hormel Foods CorpHRL rallied in premarket trading Thursday, after the parent of food brands including SPAM, SKIPPY, Hormel deli meats and chili and Applegate reported fiscal first-quarter results that topped expectations.

  • Shares of Barrick Gold Corp. GOLD surged in premarket trading, to bounce off the previous session’s 10-month closing low, after the gold miner reported fourth-quarter profit and revenue that beat expectations.



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