U.S. Stocks May See Initial Strength Following Upbeat Economic Data

After ending the previous session little changed, stocks are likely to move to the upside in early trading on Thursday. The major index futures are currently pointing to a higher open for the markets, with the S&P 500 futures up by 0.6 percent.

The futures remained positive following the release of a slew of U.S. economic data, including a Commerce Department report showing U.S. economic activity surged by more than expected in the fourth quarter of 2022.

The report said real gross domestic product shot up by 2.9 percent in the fourth quarter after spiking by 3.2 percent in the third quarter. Economists had expected GDP to jump by 2.6 percent.

The stronger than expected GDP growth reflected increases in private inventory investment, consumer spending, government spending, and non-residential fixed investment.

Meanwhile, the positive contributions were partly offset by decreases in residential fixed investment and exports.

A separate report released by the Commerce Department showed new orders for U.S. manufactured durable goods soared by much more than expected in the month of December.

The Commerce Department said durable goods orders spiked by 5.6 percent in December after tumbling by 1.7 percent in November.

Economists had expected durable goods orders to surge by 2.5 percent compared to the 2.1 percent slump that had been reported for the previous month.

Excluding a substantial rebound in orders for transportation equipment, durable goods orders edged down by 0.1 percent in December after inching up by 0.1 percent in November. Ex-transportation orders were expected to come in unchanged.

The Labor Department also released a report unexpectedly showing another modest decrease in first-time claims for U.S. unemployment benefits in the week ended January 21st.

The report said initial jobless claims edged down to 186,000, a decrease of 6,000 from the previous week’s revised level of 192,000

The dip surprised economists, who had expected jobless claims to rise to 205,000 from the 190,000 originally reported for the previous week.

Shortly after the start of trading, the Commerce Department is due to release its report on new home sales in the month of December. New home sales are expected to tumble by 3.6 percent to an annual rate of 617,000 after surging by 5.8 percent to an annual rate of 640,000 in November.

Stocks moved sharply lower in early trading on Wednesday but staged a significant recovery over the course of the session. The major averages climbed well off their lows of the session, with the Dow finishing the day just above the unchanged line.

After falling by more than 450 points early in the session, the Dow inched up 9.88 points or less than a tenth of a percent to 33,743.84.

Meanwhile, the S&P 500 edged down just 0.73 points or less than a tenth of a percent to 4,016.22, while the Nasdaq dipped 20.91 points or 0.2 percent to 11,313.36 after plunging as much as 2.3 percent.

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher on Thursday, although Japan’s Nikkei 225 Index bucked the uptrend and edged down by 0.1 percent. Hong Kong’s Hang Seng Index surged by 2.4 percent, while South Korea’s Kospi jumped by 1.6 percent.

Meanwhile, the major European markets have also moved to the upside on the day. While the German DAX Index has inched up by 0.1 percent, the U.K.’s FTSE 100 Index is up by 0.3 percent and the French CAC 40 Index is up by 0.7 percent.

In commodities trading, crude oil futures are jumping $1.15 to $81.30 a barrel after inching up $0.02 to $80.15 barrel on Wednesday. Meanwhile, after rising $7.20 to $1,942.60 an ounce in the previous session, gold futures are falling $9.70 to $1,932.90 an ounce.

On the currency front, the U.S. dollar is trading at 130.02 yen versus the 129.59 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.0892 compared to yesterday’s $1.0872.

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