Stocks May Move Back To The Downside In Early Trading - U.S. Commentary

(RTTNews) - Stocks are likely to move to the downside in early trading on Thursday, giving back some ground after ending the previous session moderately higher. The major index futures are currently pointing to a lower open for the markets, with the Dow futures down by 31 points.

The downward momentum for the markets is partly due to concerns about the economic impact of new sanctions against Russia.

Citing Russia's continued attempts to destabilize Ukraine, the U.S. imposed a broad-based package of sanctions on entities in the Russian financial services, energy, and arms or related materiel sectors.

Peter Boockvar, chief market analyst at the Lindsey Group, described the sanction news as a convenient excuse to sell stocks, suggesting that the continued highs by the major averages are hiding the tenuous internals of the U.S. stock market.

A disappointing report on new residential construction in the U.S. may also weigh on the markets, with housing starts falling to a nine-month low.

The Commerce Department said housing starts tumbled 9.3 percent to an annual rate of 893,000 in June from the revised May estimate of 985,000.

The sharp drop came as a surprise to economists, who had expected housing starts to climb to 1.020 million from the 1.001 million originally reported for the previous month.

Building permits, an indicator future housing demand, also fell 4.2 percent to an annual rate of 963,000 in June from the revised May rate of 1.005 million.

On the other hand, the Labor Department released a separate report showing an unexpected drop in initial jobless claims in the week ended July 12th.

The report said jobless claims edged down to 302,000, a decrease of 3,000 from the previous week's revised level of 305,000. Economists had expected jobless claims to climb to 310,000.

After experiencing choppy trading for much of the session on Tuesday, stocks moved mostly higher during trading on Wednesday. With the gains on the day, the Dow closed higher for the fourth consecutive session, reaching a new record high.

The major averages all ended the day moderately higher. The Dow climbed 77.52 points or 0.5 percent to 17,138.20, the Nasdaq rose 9.58 points or 0.2 percent to 4,425.97 and the S&P 500 advanced 8.29 points or 0.4 percent to 1,981.57.