U.S. Stocks May Regain Ground In Early Trading

After closing lower for two consecutive sessions, stocks may move back to the upside 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 108 points.

The futures remained positive after payroll processor ADP released a report showing private sector employment increased by much less than expected in the month of May.

ADP said private sector employment climbed by 128,000 jobs in May after jumping by a downwardly revised 202,000 jobs in April.

Economists had expected private sector employment to surge by 300,000 jobs compared to the addition of 247,000 jobs originally reported for the previous month.

The data has contributed to a decrease by treasury yields, with the yield on the benchmark ten-year note pulling back below 2.9 percent.

The weaker than expected job growth may subsequently generate optimism the Federal Reserve will be less aggressive in raising interest rates.

Meanwhile, the Labor Department released a report showing first-time claims for U.S. unemployment benefits unexpectedly declined in the week ended May 28th.

The report showed initial jobless claims fell to 200,000, a decrease of 11,000 from the previous week’s revised level of 211,000.

Economists had expected jobless claims to come in unchanged compared to the 210,000 originally reported for the previous week.

On Friday, the Labor Department is scheduled to release its more closely watched monthly employment report, which includes both public and private sector jobs.

Economists currently expect employment to jump by 325,000 jobs in May after surging by 428,000 jobs in April, while the unemployment rate is expected to edge down to 3.5 percent from 3.6 percent.

Not long after the start of trading, the Commerce Department is scheduled to release its report on new orders for manufactured goods in the month of April. Economists expect factory orders to increase by 0.7 percent.

Stocks fluctuated over the course of the trading session on Wednesday before ending the day mostly lower. With the decrease on the day, the major averages extended the pullback seen during trading on Tuesday.

The major averages climbed well off their worst levels in afternoon trading but still closed in negative territory. The Dow fell 176.89 points or 0.5 percent to 32,813.23, the Nasdaq declined 86.93 points or 0.7 percent to 11,994.46 and the S&P 500 slid 30.92 points or 0.8 percent to 4,101.23.

In overseas trading, stock markets across the Asia-Pacific region turned in another mixed performance during trading on Thursday. Japan’s Nikkei 225 Index edged down by 0.2 percent, while China’s Shanghai Composite Index rose by 0.4 percent.

Meanwhile, European stocks have moved mostly higher, with the markets in London closed for the queen’s Platinum Jubilee. While the French CAC 40 Index has jumped by 1.2 percent, the German DAX Index has advanced by 0.8 percent.

In commodities trading, crude oil futures are falling $0.90 to $114.36 a barrel after climbing $0.59 to $115.26 a barrel on Wednesday. Meanwhile, after inching up $0.30 to $1,848.70 an ounce in the previous session, gold futures are rising $5.40 to $1,854.10 an ounce.

On the currency front, the U.S. dollar is trading at 129.66 yen versus the 130.13 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.0698 compared to yesterday’s $1.0650.

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