Thursday September 10th


Dow Futures briefly fall 100 points

U.S. stock index futures pared gains to trade in negative territory Thursday after another day of volatility on Wednesday and another round of disappointing data from Japan and China. Traders will likely look past economic reports Thursday and the normal triggers of market movements to see if conditions stabilize, creating an environment where the Fed would be more comfortable hiking rates for the first time in more than nine years. The Dow Jones industrial average, S&P 500 futures held lower, with the Dow futures off about 50 points after earlier dipping more than 100. Nasdaq futures briefly attempted slight gains. Wall Street is plainly split on whether the Fed will hike next week, with some saying the markets are already displaying enough volatility to sideline the central bank for several months or more. But most agree the markets have not priced in a rate increase, and there could be a violent reaction to whatever it does. On the data front, initial jobless claims fell 6,000 to a seasonally adjusted 275,000 for the week ended Sept. 5, the Labor Department said on Thursday. It was the 27th straight week that claims remained below the 300,000 threshold, which is usually associated with a strengthening labor market. U.S. import and export prices posted their largest drop in seven months. Treasury yields held slightly below earlier levels, with the 2-year yield at 0.73 percent and the 10-year yield at 2.20 percent. The U.S. dollar traded flat against major world currencies, with the euro topping $1.12 and the yen near 121 yen against the greenback. Wholesale trade data for July will be released at 10 a.m., ET. In Europe, the pan-European STOXX 600 index was more than 1 percent lower after weak data from Japan and China. Core machinery orders in Japan fell by 3.6 percent in July, while in China, the producer price index fell by 5.9 percent. Asian shares outside South Korea were on the back foot on Thursday, as economic data out of the region's top two economies heightened concerns about growth. Japan's core machinery orders fell 3.6 percent in July from a month earlier, missing expectations for a rise of 3.7 percent, underscoring the need for Bank of Japan (BOJ) to offer fresh stimulus. Over in China, the consumer price index (CPI) rose 2 percent in August from a year earlier, beating expectations for a 1.8 percent gain and up from 1.6 percent in July. However, the producer price index (PPI) declined 5.9 percent, compared with an expected 5.5 percent drop and after a 5.4 percent decline in the previous month. This marks the 42nd consecutive month of declines. Nikkei skids 2.5%. Japan's benchmark Nikkei 225 index failed to extend Wednesday's spectacular run, after a surprise miss in core machinery orders added to concerns about Asia's second-biggest economy. Oil prices stabilized on Thursday ahead of weekly U.S. stocks data, despite fresh signs of an economic slowdown in China and Japan that fueled concerns growth could be grinding to a halt. Crude prices have fallen more than 3 percent this week on persistent worries over global demand and a supply glut. Benchmark crude futures nevertheless posted modest gains ahead of the U.S. Department of Energy oil stocks report at 11 a.m. EDT (1500 GMT), which is expected to show a rise, according to a Reuters survey. Brent crude futures rose 6 cents to $47.64 per barrel by 8:20 a.m. EDT (1220 GMT). U.S. crude futures were up 19 cents at $44.34 a barrel. Gold edged off four-week lows on Thursday as European stocks snapped a three-day run of gains, but traders remained cautious as they awaited fresh clues on the timing of a U.S. rate rise. The precious metal fell 1.4 percent on Wednesday, its biggest one-day drop in nearly two months, as strength in stocks and the dollar pushed prices through key chart levels to $1,101.11 an ounce, the lowest since Aug. 11. Prices could fall further ahead of the U.S. Federal Reserve policy meeting on Sept. 16-17, traders said. pot gold was up about 0.3 percent at $1,108.81 an ounce, while U.S. gold futures for December delivery were up $6 an ounce at $1,108.