After ending the previous session little changed, stocks may move to the downside in early trading on Thursday. The major index futures are currently pointing to a lower open for the markets, with the Dow futures down by 162 points.
A report from China’s National Bureau of Statistics showing Chinese GDP growth slowed by more than expected in the second quarter may lead to renewed concerns about the global economic outlook.
The report showed Chinese GDP grew 7.9 percent year-on-year in the second quarter, shy of expectations for a gain of 8.1 percent and down sharply from 18.3 percent in the three months prior.
Indications some central banks around the world are considering tightening monetary policy much sooner than the Federal Reserve may add to worries about the global economy.
The downward momentum on Wall Street also comes traders continue to digest the latest earnings news, including quarterly results from Morgan Stanley (MS).
Morgan Stanley is moving lower in pre-market trading despite reporting better second quarter results that exceeded analyst estimates.
The drop by Morgan Stanley mirrors the performance by other big-name companies that have reported better than expected results, leading to speculation the upbeat earnings news has already been priced into the markets.
A slew of U.S. economic data was also released this morning, including a report from the Labor Department showing first-time claims for unemployment benefits decreased in line with economist estimates in the week ended July 10th.
The report said initial jobless claims fell to 360,000, a decrease of 26,000 from the previous week’s revised level of 386,000.
Economists had expected jobless claims to dip to 360,000 from the 373,000 originally reported for the previous week.
With the decrease, initial jobless claims once again fell to their lowest level since hitting 256,000 in the week ended March 14, 2020.
A separate report released by the Labor Department showed U.S. import prices increased in line with economist estimates in the month of June.
Meanwhile, separate reports from the New York Federal Reserve and the Philadelphia Federal Reserve showed mixed readings on the pace of growth in manufacturing activity in the two regions.
Just before the start of trading, the Federal Reserve is due to release its report on industrial production in the month of June. Industrial production is expected to increase by 0.7 percent in June after climbing by 0.8 percent in May.
Federal Reserve Chair Jerome Powell is also scheduled to testify before the Senate Banking Committee beginning at 9:30 am ET.
Following the pullback seen during trading on Tuesday, stocks showed a lack of direction over the course of the trading day on Wednesday. The major averages spent the day bouncing back and forth across the unchanged line.
Eventually, the major averages ended the day little changed. While the Nasdaq edged down 32.70 points or 0.2 percent to 14,644.95, the Dow inched up 44.44 points or 0.1 percent to 34,933.23 and the S&P 500 crept up 5.09 points or 0.1 percent to 4,374.30.
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