The major U.S. index futures are pointing to a lower opening on Thursday, although the futures have come off their lows following the release of a trio of economic reports. Commodities prices are extending their declines amid a lack of clarity on the economic outlook. Jobless claims declined just about in line with expectations and retail sales growth, though soft, suggested a strong consumer trend if we take into account the upward revision to the previous month's figures. Meanwhile, fuel prices are fueling inflationary pressures-a definite cause of concern at a time when the recovery has still not found a firmer footing. Earlier in the day, China announced further tightening measures, accentuating the nervousness about global growth. The tidings on the corporate front is mixed, with Cisco (CSCO) cautioning of a rough ride ahead, while retailers are reporting stronger results and issuing upbeat outlook. U.S. stocks retreated on Wednesday after advancing in each of the previous three sessions, as a retreat in commodity prices and mixed corporate news weighed on the markets. The major averages opened modestly lower and moved sideways until early afternoon trading. After declining sharply in the mid-session, the indexes moved sideways once again before closing notably lower. The Dow Industrials ended down 130.33 points or 1.02 percent at 12,630 and the Nasdaq Composite ended at 2,845, down 26.83 points or 0.93 percent. Meanwhile, the S&P 500 Index fell 15.08 points or 1.11 percent before closing at 1,342. Twenty-five of the thirty Dow components ended the session lower, with Disney (DIS) leading the slide with a 5.44 percent decline. Alcoa (AA), Caterpillar (CAT), Chevron (CVX), DuPont (DD) and Exxon Mobil (XOM) also declined sharply. On the other hand, Intel (INTC) and Johnson & Johnson (JNJ) advanced strongly. Among the sector indexes, the Dow Jones U.S. Basic Materials Average fell 2.92 percent, the NYSE Arca Oil Index slipped 2.89 percent, the Philadelphia Oil Service Index receded 3.24 percent and the NYSE Arca Gold Bugs Index lost 3.11 percent. Additionally, the NYSE Arca Disk Drive Index fell 3.44 percent. On the economic front, the trade deficit widened to $48.2 billion in March, marking the biggest deficit since June 2010. The wider deficit reflected a spike in petroleum imports, which pushed up imports by 4.9 percent, although exports rose 4.6 percent month-over-month, the biggest increase since September 2008. Currency, Commodity Markets Crude oil futures are slipping $1.70 to $96.51 a barrel after declining $5.67 to $98.21 a barrel on Wednesday. The previous session’s pullback came amid the strengthening of the dollar due to waning risk appetite, and the release of the weekly oil inventory report. The report showed that crude oil stockpiles rose by 3.8 million barrels to 370.3 million barrels in the week ended May 6th. Inventories remained above the upper limit of the average range. Gasoline stockpiles rose by 1.3 million barrels but remained in the lower limit of the average range. Meanwhile, distillate inventories fell by 0.8 million barrels but remained in the upper limit of the average range. Refinery capacity utilization averaged 81.7 percent over the four weeks ended May 6th compared to 82.8 percent over the previous four weeks. Gold futures, which fell $15.50 to $1,501.40 an ounce on Wednesday, are currently declining $12.50 to $1,488.90 an ounce. Among currencies, the U.S. dollar is trading at 81.1555 yen compared to the 81.0650 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.4160 compared to yesterday’s $1.4192. Asia The Asian markets closed Thursday’s session lower, although the Taiwanese market bucked the downtrend with a modest gain. The overnight slump by Wall Street stocks and the commodity rout weighed heavily on the stocks in the region. In another stunning move, after the close of trading, China announced an increase in its reserve requirement ratio by 0.50 percent points, a move widely anticipated by the markets following the release of the inflation data this week. Japan’s Nikkei 225 average languished in negative territory throughout the session before closing at the lows of the session. The index ended down 147.61 points or 1.50 percent at 9,717. A majority of stocks declined in the session. Fujikura, Nitto Boseki, Olympus and Tokyo Electric were among the biggest decliners. Takeda Pharma, which was rumored to buy Swiss-based Nycomed for about $14 billion, fell over 1 percent. Nissan reported after the markets closed that it reversed to a profit of 30.8 billion yen in its fourth quarter from a loss of 11.6 billion yen last year. Sales rose 10 percent to 2.351 trillion yen. Japan reported a current account surplus of 1.679 trillion yen for March, a 34.3 percent drop from a year ago. Economists had expected a surplus of 1.750 trillion yen. The nation’s trade surplus also came in softer than expectations at 240.3 billion yen. Australia’s All Ordinaries opened lower and plunged further in early trading before showing a consolidation move around lower levels. The index closed down 81.60 points or 1.68 percent at 4,777, its lowest closing level since March 23rd, 2011. Energy, material and healthcare stocks spearheaded an across the board sell-off in today’s session. Sentiment was impacted by an unemployment report released by the Australian Bureau of Statistics, which showed that the number of employed Australians fell by 22,100 to 11.44 million in April, while economists expected an addition of 17,000 jobs. Meanwhile, the unemployment rate remained unchanged at 4.9 percent. Hong Kong’s Hang Seng Index opened sharply lower and moved sideways for the rest of the session. At the close of trading, the index was down 218.04 points or 0.94 percent at 23,074. Thirty-nine of the forty-five index components retreated. Europe The major European markets are moving to the downside on Thursday amid the continuing weakness in the commodity space. The French CAC 40 Index and the German DAX Index are receding 1.28 percent and 1.29 percent, respectively, while the U.K.’s FTSE 100 Index is declining 0.96 percent. German insurer Allianz reported first quarter earnings of 857 million euros, sharply lower than 1.57 billion euros last year. Operating profit declined 4.2 percent to 1.66 billion euros. However, the company said it remains on track to hit its 2011 operating profit goal. Fraport, which operates the Frankfurt Airport, reported an increase in its passenger and cargo traffic in April. The company also said its first quarter EBITDA improved to 128.5 million euros from 115.8 million euros last year, as revenues rose 6.8 percent to 476.1 million euros. The company maintained its 2011 forecast for revenues of over 2.3 billion euros and EBITDA growth of 10-15 percent. German steel maker Salzgitter reported a first quarter pre-tax profit that rose to 56.3 million euros from 17.1 million euros last year, with profits coming in above the estimates of most analysts. The company also said it expects a pre-tax profit of 150 million euros for 2011. U.K. Telecom company BT Group reported a 26 percent increase in its fourth quarter profits to 473 million pounds. The company also announced a 9 percent increase in its final dividend. On the economic front, an inflation report released by French statistical agency INSEE showed that its harmonized index of consumer prices rose 2.2 percent year-over-year in April, the same rate as in the previous month. The consumer price inflation was above the European Central Bank’s target for the second straight month. The U.K. Office for National Statistics said the U.K.’s industrial production rose 0.3 percent month-over-month in March, softer than the 0.8 percent increase expected by economists. The annual growth of 0.7 percent also trailed the consensus estimate for a 1.1 percent increase. The industrial production report released by Eurostat showed that the euro area’s industrial output rose year-over-year in March, although the growth was less than what economists had expected. On a monthly basis, output was down 0.2 percent compared to the 0.3 percent growth expected by economists. U.S. Economic Reports The Commerce Department reported that retail sales rose 0.5 percent month-over-month in April following an upwardly revised 0.9 percent increase in March. After auto sales were stripped off, retail sales increased a steeper 0.6 percent. Economists had expected both the headline number and excluding auto number to show 0.6 percent growth each.

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