US Stocks Struggle for Direction on Weak Economic Data
US stocks opened higher on Thursday but trimmed gains after a
larger-than-expected rise in weekly jobless claims that pointed to a
slower pace hiring in the recent past.
Adding to the recent slew of recent data pointing to weakening trend in the US labor market, initial weekly jobless claims in early May jumped for a third week in a row to a 14-month high of 294,000, providing further evidence to the recent weakness in the US labor market.
In early trade, the Dow Jones Industrial Average rose 35 point to 17,747 while S&P 500 added 3 point to 2,067. Meanwhile, tech heavy Nasdaq Composite index dipped 8 points to 4,752.
Investors now expect that weakness in the labor market might force the Federal Reserve to refrain from raising interest rate during 2016. Investor sentiment was also boosted on the back of rally in oil prices after EIA said that oil demand might surprise on the upside.
Going forward investors will now scrutinize speeches from three Fed officials on Thursday. Their comments will be assist investors to get insight over the timing of next Fed rate-hike decision.
BOE cheers were short-lived
Elsewhere, BOE met investors expectations by leaving its monetary policy unchanged. European investors cheered the BOE decision but was short-lived as most European indices turned lower in tandem with the US markets.