By Modupe Gbadeyanka
The major US index futures are pointing to a higher opening on Thursday following the lacklustre performance seen in the previous session.
The markets may benefit from recent upward momentum, which has helped propel the major averages to new record highs. Buying interest may be somewhat subdued, however, as political uncertainty could keep some traders on the sidelines.
Stocks showed a lack of direction throughout the trading session on Wednesday before ending the day little changed. Despite the choppy trading on the day, the Dow still managed to climb to another new record closing high.
The major averages eventually ended the day on opposite sides of the unchanged line. While the Dow rose 32.60 points or 0.2 percent to 20,775.60, the Nasdaq edged down 5.32 points or 0.1 percent to 5,860.63 and the S&P 500 dipped 2.56 points or 0.1 percent to 2,362.82.
The lacklustre close on Wall Street came following the release of the minutes of the Federal Reserve’s latest monetary policy meeting.
The minutes said many meeting participants expressed the view that it might be appropriate to raise interest rates again fairly soon if incoming data on the labour market and inflation is in line with or stronger than current expectations.
A few participants noted that continuing to remove policy accommodation in a timely manner, potentially at an upcoming meeting, would allow the Fed greater flexibility in responding to subsequent changes in economic conditions, the minutes said.
While some participants warned of the risk of a sizable undershooting of the longer-run normal unemployment rate, others continued to see downside risks to inflation.
Earlier in the day, the National Association of Realtors released a report showing that existing home sales rebounded by more than expected in the month of January.
NAR said existing home sales surged up by 3.3 percent to an annual rate of 5.69 million in January after falling by 1.6 percent to a revised 5.51 million in December.
Economists had expected existing home sales to climb to an annual rate of 5.54 million from the 5.49 million originally reported for the previous month.
With the bigger than expected increase, existing home sales climbed to their highest level since reaching 5.79 million in February of 2007.
Most of the major sectors ended the day showing only modest moves, contributing to the lackluster close by the broader markets.
Energy stocks saw considerable weakness, however, with a drop by the price of crude oil weighing on the sector. Reflecting the weakness in the energy sector, the NYSE Arca Natural Gas Index plunged by 2.5 percent, the Philadelphia Oil Service Index slumped by 1.9 percent and the NYSE Arca Oil & Gas Index dropped by 1.5 percent.
Notable weakness was also visible among gold stocks, as reflected by the 1.8 percent loss posted by the NYSE Arca Gold Bugs Index. Steel and biotechnology stocks also moved to the downside on the day, while some strength was visible among chemical stocks.
Adedapo Adesanya