By Ellie Ismailidou and Barbara Kollmeyer, MarketWatch
Jobless claims hold multidecade lows; Gold rises more than
1%
Stock futures in negative territory on Thursday, after a report
on U.S. jobless claims, which remained near multidecade lows,
pointed to continuing recovery in the labor market.
The level of jobless claims
(http://www.marketwatch.com/story/us-jobless-claims-fall-9000-to-26700-2016-04-07)remained
"very benign but may be bottoming out after quite a multiyear fall
from the peak in March 2009," said Peter Boockvar, chief market
analyst at The Lindsey Group, in emailed comments after the
release.
But the news didn't shake off some jitters in the market, as
investors continued to assess minutes of the Federal Open Market
Committee and concluded there may be a few more hawks than they had
expected.
Connor Campbell, financial analyst at SpreadEx said an April
interest-rate hike is off the table, but "the fact that there
appears to be a slight increase in the number of hawks in the
central bank (with some members open to an April hike) may have
spooked investors," in a note to clients.
A fresh drop in oil prices also weighed on sentiment, while
investors plowed money into gold and the yen.
Dow Jones Industrial Average futures were down 80 points, or
0.4%, to 17,551, while S&P 500 futures fell 10 points, or 0.5%
to 2,050. Nasdaq-100 futures lost 18 points, or 0.4%, to 4,517.
The moves came after U.S. stocks closed solidly in the green on
Wednesday
(http://www.marketwatch.com/story/us-stock-futures-edge-higher-as-oil-jumps-2016-04-06),
boosted by higher oil prices and minutes from the Fed's latest
policy meeting
(http://www.marketwatch.com/story/sentiment-on-fed-running-against-april-rate-hike-minutes-show-2016-04-06),
which showed a reluctance among members to raise interest rates as
soon as April.
The prospects of a dovish Fed and a Bank of Japan that may not
intervene to support its currency, sent the dollar
(http://www.marketwatch.com/story/dollar-slides-to-fresh-18-month-low-vs-yen-as-market-bets-on-no-boj-intervention-2016-04-07)
to fresh 18-month lows against the yen . The pair last traded
around Yen108.r3, at levels not seen since late October 2014, and
sharply below the Yen109.79 seen late Wednesday in New York.
All the normal ingredients for an equities rally are
there--dovish Fed, small lift in oil prices--but markets have also
been dealing with hefty volatility since the start of the year to
mid-February, said Brenda Kelly, head analyst, London Capital
Group.
"We remain at the mercy of the oil market and decisions on
freezing or cutting on April 17th in Doha will likely set the tone
for equity markets too," said Kelly, in emailed comments. Oil
prices
(http://www.marketwatch.com/story/oil-prices-higher-on-surprise-fall-in-crude-inventories-2016-04-07)
traded flat on Thursday, erasing an earlier lead.
She said potential for corporate defaults is another factor that
appeared to be hitting sentiment. The next wave of such defaults
could hit investors harder than ever, Bloomberg
(http://www.bloomberg.com/news/articles/2016-04-05/the-coming-default-wave-is-shaping-up-to-be-among-most-painful)
reported on Thursday.
In his annual letter to shareholders, J.P. Morgan Chase &
Co. (JPM) Chief Executive James Dimon warned that increased market
volatility is likely here to stay, even as he argued that his firm
is getting progressively stronger and safer
(http://www.marketwatch.com/story/market-volatility-is-here-to-stay-says-jp-morgans-dimon-2016-04-06).
Data docket: Consumer credit for February is due at 3 p.m.
Eastern.
Federal Reserve Chairwoman Janet Yellen will hold conversations
with former Federal Reserve Chairmen Ben Bernanke and Alan
Greenspan at the International House in New York City at 5:30 p.m.
Eastern.
Kansas City Fed President Esther George will speak on the
economy in York, Nebraska at 8:15 p.m. Eastern.
Read: Fed's Bullard suggests boosting U.S. growth via tax reform
(http://www.marketwatch.com/story/feds-bullard-boost-us-growth-via-tax-reform-2016-04-07)
Stocks to watch: Valeant Pharmaceuticals International Inc.
(VRX.T) on Wednesday secured a commitment from loan holders that
would buy the drugmaker time
(http://www.marketwatch.com/story/valeant-convinces-loan-holders-to-loosen-financial-terms-2016-04-07)
as it attempts to resuscitate itself.
ConAgra Foods Inc. (CAG) beat profit and sales expectations
(http://www.marketwatch.com/story/conagra-beats-profit-and-sales-expectations-2016-04-07).
Rite Aid (RAD) topped the Street's view with profit but missed
with sales
(http://www.marketwatch.com/story/rite-aid-beats-profit-expectations-but-misses-on-sales-2016-04-07).
L Brands Inc.'s (LB) Victoria's Secret announced layoffs as part
of a restructuring that will also cut some of its merchandise
categories.
Sprint Corp. (S) said late Wednesday it reached a deal
(http://www.marketwatch.com/story/sprint-reaches-deal-to-sell-and-lease-back-assets-to-raise-22-billion-2016-04-06)
with several bankrupt entities to sell and then lease back network
assets which will then be used as collateral to raise $2.2
billion.
Other markets: The Stoxx Europe 600 turned lower, after minutes
from the European Central Bank's policy meeting showed policy
makers didn't rule out further rate cuts
(http://www.marketwatch.com/story/ecb-minutes-show-more-rate-cuts-possible-2016-04-07)and
judged there was "little evidence of negative side effects" of
subzero rates.
In Asia, the Nikkei 225 index closed slightly higher. The
Shanghai Composite Index slid 1.38% as investors fretted over a
three-month ban on large shareholders selling domestic stocks that
is about to expire soon.
Gold prices surged $15.90, or 1.3%, to $1,240 an ounce
(END) Dow Jones Newswires
April 07, 2016 09:21 ET (13:21 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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