Weakness Among Tech Stocks May Weigh On Wall Street

(RTTNews) - Stocks may move to the downside in early trading on Thursday, giving back ground following the upward move seen over the two previous sessions. The major index futures are currently pointing to a lower open for the markets, with the S&P 500 futures down by 0.4 percent.

Weakness among technology stocks is likely to weigh on Wall Street, as reflected by the 1.1 percent slump by the tech-heavy Nasdaq 100 futures.

The downward momentum among tech stocks comes amid a steep drop by shares of Taiwan Semiconductor (TSM). U.S.-listed shares of the world's largest contract chipmaker are plunging by 4.4 percent in pre-market trading.

Taiwan Semiconductor is under pressure after reporting better than expected second quarter results but forecasting an increase in capital spending.

"While the case for boosting capacity is clear at a time when there is a large gap between supply and demand, shareholders will want TSMC to retain some discipline even as it looks to meet orders piling up," said AJ Bell head of markets Dan Coatsworth.

A notable increase by the price of crude oil may also generate some selling pressure, with U.S. crude oil futures jumping back above $80 a barrel.

Crude oil prices are surging after the U.S. launched a new wave of attacks in multiple locations across Iran on Wednesday night and Iran retaliated by launching fresh attacks on U.S. military bases in neighboring Gulf States.

Iran has also threatened to target "all the infrastructure in the region" if President Donald Trump's follows through on his threats to attack Iran's power plants and bridges.

In U.S. economic news, a report released by the Labor Department showed first-time claims for U.S. unemployment benefits unexpectedly dipped in the week ended July 11th.

The Labor Department said initial jobless claims fell to 208,000, a decrease of 8,000 from the previous week's revised level of 216,000.

Economists had expected jobless claims to rise to 220,000 from the 215,000 originally reported for the previous week.

The Commerce Department released a separate report showing a modest increase in U.S. retail sales in the month of June.

The Commerce Department said retail sales crept up by 0.2 percent in June after jumping by an upwardly revised 1.0 percent in May.

Economists had expected retail sales to rise by 0.3 percent compared to the 0.9 percent increase originally reported for the previous month.

Shortly after the start of trading, the National Association of Home Builders is scheduled to release its report on homebuilder confidence in the month of July. The housing market Index is expected to come in unchanged in July after dipping to 35 in June.

The National Association of Realtors is also due to release its report on pending home sales in the month of June at 10 am ET. Pending home sales are expected to decrease by 0.5 percent in June after surging by 3.8 percent in May.

After failing to sustain an early move to the upside, stocks fluctuated over the course of the trading session on Wednesday but largely maintained a positive bias before closing mostly higher.

The major averages all finished the day in positive territory, adding to the gains posted during Tuesday's session.

The Nasdaq advanced 162.22 points or 0.6 percent to 26,269.23, the S&P 500 climbed 28.81 points or 0.4 percent to 7,527.40 and the Dow rose 150.37 points or 0.3 percent to 52,658.64.

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Thursday. Japan's Nikkei 225 Index plunged by 2.8 percent, while China's Shanghai Composite Index tumbled by 1.9 percent.

The major European markets have also moved to the downside on the day. While the U.K.'s FTSE 100 Index is down by 0.4 percent, the German DAX Index and the French CAC 40 Index are both down by 1.1 percent.

In commodities trading, crude oil futures are jumping $0.90 to $80.50 a barrel after rising $0.26 to $79.60 a barrel on Wednesday. Meanwhile, after falling $17.90 to $4,051.80 an ounce in the previous session, gold futures are sliding $25.10 to $4,026.70 an ounce.

On the currency front, the U.S. dollar is trading at 162.27 yen versus the 162.18 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.1451 compared to yesterday's $1.1463.