Commodities and stock indexes moving in tandem

Good day! Thursday was off to a weak start by the time the opening bell rang. Cisco's earnings had hit a sore spot and commodity prices were still falling. Congestion afterhours on Wednesday evening was broken to the downside in the early hours of Thursday morning and although that trend found support between 6-6:30 a.m. ET, it wasn't until after the opening bell that the indexes were able to start to recover.

Dow Jones Industrial Average (Figure 1)

Thursday's premarket data didn't have much of an impact on immediate price action in the index futures, but no reaction proved to be a good reaction since the market continued to round off at lows at the opening bell approached.

First time unemployment claims fell to 434,000 last week. This was still worse than anticipated and makes the fourth week in a row that initial claims have topped 400k.

April's Producer Price Index for finished goods rose to a seasonally adjusted 0.8%. Meanwhile, retail sales were up 0.5% in April, primarily due to rising food and gas prices.

Thursday's intraday data at 10:00 a.m. ET had a more immediate impact on the market. The indexes had remained weak at the open, but confirmed the 15 minute support and took a more decisive turn to the upside following the Commerce Department's report on business inventories. Inventories in March were up 1%, which was higher than the 0.9% increase analysts' had been anticipating.

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