Wall Street open lower as data predicts rise in interest rates

Stockbrokers on the floor of New York Exchange

Stockbrokers on the floor of New York Exchange

WALL Street was set to open slightly lower on Thursday as strong economic data increased the likelihood that the Federal Reserve would raise interest rates in September, rather than later in the year.

U.S. weekly jobless claims rose more-than-expected last week but their four-week moving average was at its lowest since April 2000. U.S. retail sales rose more than expected in July.

While inflation remains below what the Fed would like to see, the labor markets have continued to strengthen – a key factor in the central bank’s timing of a rate hike.

The Fed will probably raise rates twice this year, with the first increase coming as early as next month, according to a Reuters poll published on Thursday.

Investors had pared back bets of a September rate hike after China’s devaluation of the yuan on Tuesday.

China’s central bank said on Thursday there was no basis for further depreciation of the yuan, pointed to strong economic fundamentals, but investors remained skeptical.

“They’re taking the Chinese central bank at its word, but I’m still taking those comments with a pinch of salt,” said Hantec Markets’ analyst Richard Perry.

Sources told Reuters that some powerful voices within the Chinese government were pushing for the yuan to go still lower, suggesting pressure for an overall devaluation of almost 10 percent.

S&P 500 e-minis ESc1 were down 3 points, or 0.14 percent, with 263,577 contracts traded at 9:13 a.m. ET (1313 GMT).

Nasdaq 100 e-minis NQc1 were down 4.5 points, or 0.1 percent, on volume of 40,580 contracts.

Dow e-minis 1YMc1 were down 26 points, or 0.15 percent, with 35,696 contracts changing hands.

U.S. stock had slumped over 1 percent early on Wednesday, before sharply reversing course to close flat after energy shares and Apple (AAPL.O) bounced back.

Cisco’s (CSCO.O) shares rose 3.9 percent to $29 premarket after the network equipment maker’s profit beat expectations.

Tesla (TSLA.O) rose 1.6 percent to $242.07 after the electric-car maker said it plans to raise about $500 million through a share sale, with CEO Elon Musk buying shares worth up to $20 million.

Kohl (KSS.N) fell 7.1 percent to $57.10 after the department store operator reported lower-than-expected quarterly same-store sales.

Companies scheduled to report after the close of market on Thursday include King Digital Entertainment KING.O, Applied Materials (AMAT.O) and Nordstrom (JWN.N).

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