After moving mostly lower over the two previous sessions, stocks are likely to see further downside in early trading on Thursday. The major index futures are currently pointing to a sharply lower open for the markets, with the Dow futures down by 312 points.
Renewed uncertainty about a new stimulus bill is likely to weigh on Wall Street after Treasury Secretary Steven Mnuchin suggested a new relief package is not likely to pass before next month’s elections.
Senate Majority Leader Mitch McConnell has also cast doubts on whether a bill can pass before the elections and recently announced plans to vote on a more limited relief package.
A surge in new coronavirus cases across Europe as well as tightened restrictions to battle the second wave of infections is also likely to generate negative sentiment.
Europe now has over 7.2 million confirmed cases of the virus, according to the World Health Organization.
The European Commission warned that EU governments were unprepared for the new surge of Covid-19 infections and urged states to adopt a common strategy for the new phase of the pandemic.
“While the evolution of the pandemic is getting back to March levels, our state of preparedness is not,” said European Commission Vice President Margaritis Schinas.
Stocks futures saw continued weakness following the release of a report from the Labor Department showing an unexpected increase in first-time claims for U.S. unemployment benefits in the week ended October 10th.
The report said initial jobless claims climbed to 898,000, an increase of 53,000 from the previous week’s revised level of 845,000.
Economists had expected jobless claims to edge down to 825,000 from the 840,000 originally reported for the previous week.
Stocks moved mostly lower over the course of the trading day on Wednesday, extending the pullback seen on Tuesday. The major averages slid firmly into negative territory after showing a lack of direction in early trading.
The major averages ended the session off their worst levels of the day but still firmly in the red. The Dow dropped 165.81 points or 0.6 percent to 28,514.00, the Nasdaq slid 95.17 points or 0.8 percent to 11,768.73 and the S&P 500 fell 23.26 points or 0.7 percent to 3,488.67.
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Thursday. Japan’s Nikkei 225 Index fell by 0.5 percent, while Hong Kong’s Hang Seng Index tumbled by 2.1 percent.
The major European markets have also shown significant moves to the downside on the day. While the German DAX Index has plunged by 3 percent, the French CAC 40 Index is down by 2.6 percent and the U.K.’s FTSE 100 Index is down by 2.2 percent.
In commodities trading, crude oil futures are slumping $1.44 to $39.60 a barrel after climbing $0.84 to $41.04 a barrel on Wednesday. Meanwhile, after jumping $12.70 to $1,907.30 an ounce in the previous session, gold futures are sliding $8.30 to $1,899 an ounce.
On the currency front, the U.S. dollar is trading at 105.18 yen versus the 105.17 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.1704 compared to yesterday’s $1.1746.
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