(RTTNews) - Stocks are showing notable weakness during pre-market trading on Thursday after posting substantial losses during Wednesday’s session. The weakness comes as investors respond to the Labor Department’s weekly jobless claims report as well as its preliminary report on labor productivity and costs in the third quarter.

With uncertainty in the global markets, the economic news will most likely have a notable affect on the overall mood of the U.S. markets. Further influencing the trading is another round of corporate news and notable weakness in the other global markets.

The weekly jobless claims report showed that the number of continuing unemployment claims reached the highest level in 25 years, with an increase of 122,000 to an adjusted 3.84 million in the week ending October 25th.

Meanwhile, the number of initial jobless claims fell by 4,000 to 481,000 in the week ending November 1st, the government agency added.

The Labor Department’s third quarter productivity report showed that worker efficiency grew 1.1 percent in the quarter, which marks a slowdown from a 3.6 percent pace of growth in the second quarter.

The slowing productivity growth has caused labor costs to pick up. Unit labor costs increased by 3.6 percent in the third quarter, compared with a 0.1 percent decline in the second quarter.

On the earnings front, Activision Blizzard (ATVI), Cisco (CSCO), and Teva Pharmaceutical (TEVA) all released quarterly earnings since the close of trading on Wednesday. While Activision is showing a strong performance, both Cisco and Teva are under pressure.

Cisco, the world’s largest computer networking gear maker, reported adjusted first quarter earnings that came in above analysts’ expectations. However, the adjusted earnings included a tax benefit of $162 million or $0.03 per share relating to a settlement of certain U.S. income tax matters.

John Chambers, Cisco’s chairman and CEO, was pleased with the first quarter results but warned that orders dropped off dramatically in October. He said the slowdown already underway in the U.S. spread to Europe, emerging markets and lastly Asia during the last quarter.

Stocks ended Wednesday’s session well below the unchanged line after seeing notable gains on Tuesday. The weakness came as investors engaged in profit taking and reacted to some disappointing economic data and more quarterly corporate earnings reports.

While bargain hunting drove stocks up last week and early this week, some economists feel that the markets have recovered too much in light of the continued signs of economic weakness and are looking for the broader markets to test the bottom yet again.

The major averages saw some further downside going into the close of trading, ending the session just off their worst levels of the day. The Dow closed down 5.1 percent, the Nasdaq closed down 5.5 percent and the S&P 500 closed down 5.3 percent.

Crude oil futures are falling $1.53 to $63.77 a barrel after receding $5.23 to $65.30 a barrel in the previous session. Wednesday’s retreat came after the release of the weekly oil inventory report, which showed that crude oil stockpiles remained unchanged at 311.9 million barrels and are still in the upper half of the average range for this time of the year.

Gasoline inventories rose by 1.1 million barrels but remain near the lower boundary of the average range, while distillate fuel inventories climbed by 1.2 million barrels.

Meanwhile, gold futures are currently trading up $2.30 at $744.70 an ounce. On Wednesday, the precious metal fell $16.90 to $742.40 an ounce.

Among currencies, the U.S. dollar is trading at 98.03 yen, stronger than 97.94 yen it fetched at the close of New York trading on Wednesday. The dollar is currently valued at $1.2824 versus the euro compared to yesterday’s $1.2956.

In overseas trading, stock markets across the Asia-Pacific region closed sharply lower on Thursday, ending a three-day winning streak. The weakness in the markets came after Wall Street plunged overnight amid renewed recession fears.

The major European markets are also under pressure, falling for a second straight session. The French CAC 40 Index and the German DAX Index are down 3.5 percent and 3.8 percent, respectively, while the U.K.’s FTSE 100 Index is posting a 3.1 percent loss.

The Bank of England lowered its benchmark interest rates by a bigger than expected 150 basis points to 3 percent at its November meeting. The bank said in a release that the past two months saw a substantial downward shift in inflation along with a marked deterioration in the outlook for economic activity at home and abroad.

At the same time, the European Central Bank announced a 50 basis point reduction in interest rates to 3.25 percent. The reduction comes on top of a 50-basis point cut on October 8th that was part of a coordinated with the world’s other major central banks.

For comments and feedback: contact editorial@rttnews.com

Copyright(c) 2008 RealTimeTraders.com, Inc. All Rights Reserved

Posted in Categories: Economy, Eurozone, Japan, Releases, UK, USA.

Subscribe by RSS Subscribe by Email