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OPEC Meeting in Focus Amid Light Economic Day

By Investors Hub

The major U.S. index futures are pointing to a higher opening on Friday, with stocks likely to regain ground after moving notably lower in the previous session.

The markets may benefit from bargain hunting, with the Dow likely to rebound after closing lower for eight consecutive sessions.

Traders are also likely to keep an eye on the outcome of the Organization of the Petroleum Exporting Countries meeting in Vienna, Austria.

A report from Reuters said OPEC ministers have reached an agreement to raise oil production by about 1 million barrels per day beginning in July.

Overall trading activity may be somewhat subdued, however, with a lack of major U.S. economic data likely to keep some traders on the sidelines.

Stocks moved mostly lower during trading on Thursday following the mixed performance seen on Wednesday. With the drop on the day, the tech-heavy Nasdaq pulled back off the record closing high set on Wednesday and the Dow extended its losing streak to eight sessions.

The major averages climbed off their worst levels going into the close but remained firmly negative. The Dow fell 196.10 points or 0.8 percent to 24,461.70, the Nasdaq slid 68.56 points or 0.9 percent to 7,712.95 and the S&P 500 dropped 17.56 points or 0.6 percent to 2,749.76.

The weakness on Wall Street was partly due to lingering concerns about the trade dispute between the U.S. and China along with uncertainty about the outcome of this week’s OPEC meeting.

Saudi Arabia and Russia are reportedly pushing for an increase in oil production, with OPEC expected to announce its decision on output on Friday.

Notable declines by some online retailers also weighed on the Nasdaq after the Supreme Court ruled states can force online shoppers to pay sales tax.

Negative sentiment may also have been generated by some disappointing economic data, including a report from the Conference Board showing a slightly smaller than expected increase by its index of leading economic indicators in the month of May.

The Conference Board said its leading economic index edged up by 0.2 percent in May after climbing by 0.4 percent in April. Economists had expected the index to rise by 0.3 percent.

“The U.S. LEI still points to solid growth but the current trend, which is moderating, indicates that economic activity is not likely to accelerate,” said Ataman Ozyildirim, Director of Business Cycles and Growth Research at the Conference Board.

A separate report from the Philadelphia Federal Reserve showed a much bigger than expected slowdown in the pace of growth in regional manufacturing activity in the month of June.

The Philly Fed said its index for current general activity slumped to 19.9 in June from 34.4 in May. While a positive reading still indicates growth in regional manufacturing activity, the index had been expected to dip to 29.0.

On the other hand, the Labor Department released a report showing a modest decrease in initial jobless claims in the week ended June 16th.

The report said initial jobless claims dipped to 218,000, a decrease of 3,000 from the previous week’s revised level of 221,000.

Economists had expected jobless claims to inch up to 220,000 from the 218,000 originally reported for the previous week.

Energy stocks saw significant weakness on the day amid expectations that the OPEC meeting in Vienna, Austria, will result in an increase in oil production.

Reflecting the weakness in the energy sector, the Philadelphia Oil Service Index plunged by 2.3 percent, the Philadelphia Oil Service Index tumbled by 2.1 percent and the NYSE Arca Natural Gas Index slumped by 1.7 percent.

Considerable weakness was also visible among biotechnology stocks, which gave back ground after moving notably higher over the two previous sessions. The NYSE Arca Biotechnology Index dropped by 1.9 percent after ending Wednesday’s trading at a record closing high.

Steel, housing, and semiconductor stocks also showed notable moves to the downside on the day, reflecting broad based weakness on Wall Street.

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Dipo Olowookere is a journalist based in Nigeria that has passion for reporting business news stories. At his leisure time, he watches football and supports 3SC of Ibadan.

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