The major U.S. index futures are pointing to a roughly flat open on Thursday on the heels of the recovery seen over the course of the previous session.
Traders may be reluctant to make significant moves as they wait for further developments regarding a new fiscal stimulus bill.
Both Democrats and Republicans have offered new stimulus proposals, although it remains to be seen if lawmakers will finally reach an agreement after months of stagnation.
In a joint statement, House Speaker Nancy Pelosi, D-Calif., and Senate Minority Leader Chuck Schumer, D-N.Y., said a bipartisan framework introduced recently should be used as the basis for immediate negotiations.
"Of course, we and others will offer improvements, but the need to act is immediate and we believe that with good-faith negotiations we could come to an agreement," Pelosi and Schumer said.
"With the imminent availability of the vaccine, it is important for there to be additional funding for distribution to take the vaccine to vaccination," the Democratic leaders added.
Some buying interest may be generated in reaction to a report from the Labor Department showing a much bigger than expected pullback in first-time claims for U.S. unemployment benefits in the week ended November 28th.
On Friday, the Labor Department is scheduled to release a more closely watched report on the employment situation in the month of November.
Economists expect employment to increase by 481,000 jobs in November after jumping by 638,000 jobs in October. The unemployment rate is expected to edge down to 6.8 percent from 6.9 percent.
After coming under pressure early in the session, stocks showed a significant turnaround over the course of the trading day on Wednesday. The major averages all climbed well off their worst levels of the day, with the Dow and the S&P 500 closing in positive territory.
The major averages finished the day mixed, as the Nasdaq edged down 5.74 points or 0.1 percent to 12,349.37. The Dow rose 59.87 points or 0.2 percent to 29,883.79 and the S&P 500 inched up 6.56 points or 0.2 percent to a new record closing high of 3,669.01.
The early weakness on Wall Street came as some traders looked to cash in on Tuesday's gains amid lingering concerns about the economic impact of the recent spike in new coronavirus cases.
Negative sentiment was also generated in reaction to a report from payroll processor ADP showing private sector employment in the U.S. increased by less than expected in the month of November.
ADP said private sector employment rose by 307,000 jobs in November after climbing by an upwardly revised 404,000 jobs in October.
Economists had expected employment to increase by 410,000 jobs compared to the addition of 365,000 jobs originally reported for the previous month.
"While November saw employment gains, the pace continues to slow," said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute.
On Friday, the Labor Department is scheduled to release its more closely watched employment report, which includes both public and private sector jobs.
Selling pressure waned over the course of the morning, however, as traders remain optimistic about potential coronavirus vaccines.
The U.K. has approved the vaccine candidate developed by Pfizer (PFE) and BioNTech (BNTX), with the vaccine expected to be rolled out next week.
Traders also seem optimism lawmakers in Washington will reach an agreement on a new fiscal stimulus bill as both parties issue new proposals.
Energy stocks turned in a strong performance on the day, benefiting from an increase by the price of crude oil.
Reflecting the strength in the energy sector, the NYSE Arca Oil Index spiked by 3 percent, the Philadelphia Oil Service Index surged up by 2.7 percent and the NYSE Arca Natural Gas Index jumped by 2 percent.
Considerable strength also emerged among airline stocks, as reflected by the 2.2 percent gain posted by the NYSE Arca Airline Index. The index ended the session at its best closing level in nine months.
Banking, computer hardware and brokerage stocks also moved notably higher over the course of the trading session.
Meanwhile, substantial weakness remained visible among housing stocks, with the Philadelphia Housing Sector Index tumbling by 2.2 percent.
Software stocks also showed a significant move to the downside, dragging the Dow Jones U.S. Software Index down by 1.8 percent.
Salesforce (CRM) posted a steep loss after the cloud-based software company announced an agreement to acquire messaging platform Slack (WORK) for $27.7 billion.
Commodity, Currency Markets
Crude oil futures are edging down $0.02 to $45.26 a barrel after climbing $0.73 to $45.28 a barrel on Wednesday. Meanwhile, after advancing $11.30 to $1,830.20 an ounce in the previous session, gold futures are rising $12.90 to $1,843.10 an ounce.
On the currency front, the U.S. dollar is trading at 104.05 yen versus the 104.42 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.2150 compared to yesterday's $1.2115.
Asia
Asian stocks rose broadly on Thursday amid expectations that a coronavirus vaccine rollout will serve as a catalyst for faster a global economic recovery.
Optimism over U.S. stimulus talks and data showing that the services sector in China expanded at a faster rate also boosted sentiment. The China Caixin services Purchasing Managers' Index rose to 57.8 from October's 56.8.
Chinese shares ended lower after the U.S. House of Representatives passed legislation that would increase oversight of Chinese companies on U.S. exchanges. The benchmark Shanghai Composite index slipped 7.24 points, or 0.2 percent, to 3,442.14.
Hong Kong's Hang Seng Index rose 195.92 points, or 0.7 percent, to 26,728.50. The private sector in Hong Kong moved barely into expansion territory in November, the latest survey from Markit Economics showed, with a services PMI score of 50.1, up from 49.8 in October.
Japanese shares ended little changed near a 29-1/2-year high amid a wave of optimism coming on the vaccine development front. Both the Nikkei 225 Index and the Topix finished marginally higher at 26,809.37 and 1,775.25, respectively.
Honda Motor and Toyota gained more than 1 percent despite news that Japan plans to ban sales of new gasoline-only cars in the mid-2030s as part of efforts to reduce the country's greenhouse gas emissions.
West Japan Railway surged 4.7 percent and Central Japan Railway added 2.6 percent after the government committed to more fiscal spending.
In economic news, the latest survey from Jibun Bank showed that the services sector in Japan continued to contract in November, albeit at a slower rate, with a services PMI score of 47.8, up from 47.7 in October.
Australian markets gained ground, with miners pacing the gainers after strong demand and a downgraded full-year iron ore forecast by Brazilian mining rival Vale propelled spot iron ore prices in China to the highest level since January 2014 this week.
The benchmark S&P/ASX 200 Index rose 25.10 points, or 0.4 percent, to 6,615.30, extending gains for a third straight session. The broader All Ordinaries Index ended up 36 points, or 0.5 percent, at 6,847.30.
Mining heavyweights BHP and Rio Tinto surged 4.9 percent and 6.9 percent, respectively, while smaller rival Fortescue Metals Group jumped 13.3 percent.
Banks ended with modest losses, while conglomerate Macquarie Group edged up slightly after announcing its agreement to buy U.S.-based investment management firm Waddell & Reed Financial Inc. for $1.7 billion in cash.
Origin Energy, Oil Search, Santos and Woodside Petroleum rose 1-2 percent after crude oil prices rebounded overnight. Qantas Airways fell over 1 percent. The airline said the reopening of Australian state borders would boost its financial position.
In economic news, a government report showed that Australia had a merchandise trade surplus of A$7.456 billion in October. That beat expectations for a surplus of A$5.8 billion and was up from the upwardly revised A$5.815 billion surplus in September.
Separately, the latest survey from Markit Economics showed that the services sector in Australia continued to expand in November, and at a faster rate, with a seasonally adjusted PMI score of 55.1, up from 53.7 in October.
Seoul stocks rose for the third straight session and hit a new record high amid investor optimism around a Covid-19 vaccine and U.S. stimulus. The benchmark Kospi climbed 20.32 points, or 0.8 percent, to 2,696.22, a day after the country's parliament approved increasing next year's budget by 2.2 trillion won.
Chip giant Samsung Electronics rose 0.3 percent, while SK Hynix advanced 2.3 percent. Automaker Hyundai Motor soared 7.7 percent after announcing it would introduce an electric vehicle-only platform early next year.
Celltrion rose 1.2 percent on hopes of conditional approval for the use of its Covid-19 drug.
Europe
European stocks are turning in a mixed performance in cautious trading on Thursday as investors await more news on stimulus negotiations and the coronavirus vaccine rollouts.
U.S. authorities plan to begin vaccinations by mid-December, while the European Medicines Agency is likely to give emergency approval on December 29th.
On the stimulus front, Japan's government has committed to more fiscal spending. U.S. President-elect Joe Biden said he believes "tradeoffs" can be made with Senate Majority Leader Mitch McConnell to ensure Congress backs a new stimulus package.
In economic releases, the euro zone services PMI was finalized at 41.7 in November, down from October's 46.9.
While the U.K.'s FTSE 100 Index has risen by 0.3 percent, the French CAC 40 Index and the German DAX Index are both down by 0.4 percent.
Investors are keeping a close eye on the British pound after the BBC reported that a Brexit deal could be reached in the next few days, less than five weeks ahead of Britain's exit from the bloc.
France warned it could veto a trade deal between the U.K. and the European Union if it doesn't like the terms.
In stock-specific action, mall operator URW has shown a notable move to the downside after announcing tender offer results.
TUI AG shares have also slumped. The travel giant has reached a deal with the German government, private investors and banks for an extra 1.8 billion euros or $2.2 billion in aid.
Orange SA shares have also declined. The telecom major announced its plans to launch a conditional public takeover bid to acquire all the shares of Orange Belgium that it does not yet own.
Meanwhile, Rolls-Royce has soared. The aerospace and defense technology major announced the acquisition of Servowatch Systems, a U.K.-based international supplier of integrated marine automation solutions for navies, commercial vessels and large yachts.
Retailer J Sainsbury has also rallied. The company said it has chosen to forgo the business rates relief on all Sainsbury's stores granted by the U.K. government and the Devolved Administrations since March.
U.S. Economic Reports
A report released by the Labor Department on Thursday showed a much bigger than expected decline in first-time claims for U.S. unemployment benefits in the week ended November 28th.
The Labor Department said initial jobless claims dropped to 712,000, a decrease of 75,000 from the previous week's revised level of 787,000.
Economists had expected jobless claims to edge down to 775,000 from the 778,000 originally reported for the previous month.
At 10 am ET, the Institute for Supply Management is scheduled to release its report on activity in the service sector in the month of November.
The ISM's services PMI is expected to edge down to 56.0 in November after dipping to 56.6 in October, although a reading above 50 would still indicate growth.
At 11 am ET, the Treasury Department is due to announce the details of this month's auctions of three-year and ten-year notes and thirty-year bonds.
Stocks In Focus
Shares of Express (EXPR) are moving sharply lower in pre-market trading after the apparel retailer reported a wider than expected third quarter loss on revenues that came in below analyst estimates.
Software company Splunk (SPLK) is also likely to come under pressure after reporting a third quarter loss that was wider than expected on weaker than expected revenues. The company also provided disappointing guidance.
On the other hand, shares Michaels Cos. (MIK) are likely to see initial strength after the arts and crafts retailer reported third quarter results that exceeded analyst estimates on both the top and bottom lines.
Jeans maker Guess? (GES) may also move to the upside in early trading after reported better than expected third quarter results.
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