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December 20, 2012 8:50 AM GMT
The U.S. stock index futures point to a lower open Thursday ahead of the Bureau of Economic Analysis’ gross domestic product (GDP) report and the Department of Labor's weekly jobless claims data.
The futures on the Dow Jones Industrial Average were down 0.25 percent, the futures on the Standard & Poor's 500 Index were down 0.31 percent and those on the Nasdaq 100 Index were down 0.16 percent.
The U.S. Bureau of Economic Analysis will report Thursday the final estimate of the third quarter GDP, which measures the annualized change in the inflation-adjusted value of all goods and services produced by the economy. The U.S. economy is expected to have expanded 3 percent in the third quarter, from a 1.3 percent rise in the second quarter. The second estimate of the third quarter GDP reported last month showed that the economy expanded 2.7 percent.
“The third revision to Q3 GDP will reflect upward revisions to private non-residential construction spending and government spending. Recent data in the Quarterly Services Survey also suggests that spending on services was greater in Q3 than in the second GDP estimate,” said a note from Credit Agricole.
Investors are also waiting for the weekly U.S. jobless claims data to be reported Thursday. The initial jobless claims report, which measures the number of individuals who filed for unemployment insurance for the first time last week, is expected to have risen to 357,000 in the week ending Dec. 15 from 343,000 in the previous week.
Meanwhile, the National Association of Realtors' Existing Home Sales report, which measures the change in the annualized number of existing residential buildings that were sold during the previous month, will be reported at 10:00 a.m. EST Thursday. Economists expect that the existing home sales would be at an annual rate of 4.87 million in November, up from October’s 4.79 million.
The U.S. stock markets declined Wednesday as the renewed concerns about the fiscal cliff weighed on the sentiment. All the three major indices ended in negative territory with the Dow Jones Industrial Average declining 0.74 percent, the S&P 500 Index down 0.76 percent and the Nasdaq Composite Index falling 0.33 percent.
Sentiment turned negative Wednesday as the latest comments from the lawmakers dampened hopes of a deal to avert the fiscal cliff and prevent the scheduled rise in tax rates and spending cuts from pushing the economy into a recession early next year.
Republican Speaker Boehner expressed his intension to put his Plan B cliff solution, which contains a tax hikes for incomes over $1 million, to the House this week while President Obama has already said he will veto any plan put forward by the Republicans to tax only those earning more than $1 million rather than the much lower threshold demanded by Obama.
European stock markets were trading lower with the DAX30 down 0.3 percent, the CAC 40 down 0.2 percent and the FTSE 100 losing 0.01 percent.
Asian stock markets were mixed Thursday since investors were worried about the U.S. fiscal cliff. The Japanese Nikkei declined 1.19 percent and India’s BSE Sensex fell 0.43 percent while South Korea’s KOSPI Composite gained 0.32 percent and Chinese Shanghai Composite rose 0.28 percent.
Meanwhile, the Bank of Japan (BOJ) eased the monetary policy for the third time in four months by expanding asset purchases. As widely expected, the BOJ at the monetary policy meeting Thursday expanded the asset-buying and lending program by 10 trillion yen to 101 trillion yen.
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