Before the Bell: Natural Gas Production Comes Out of Deep Freeze, GE Healthcare to Debut in S&P 500

Premarket action on Thursday had all three major U.S. indexes trading higher. The Dow Jones industrials were up 0.21%, the S&P 500 up 0.43% and the Nasdaq 0.66% higher.

All 11 market sectors closed lower Wednesday, with energy (−2.22%) and technology (−1.64%) slipping the most. Financials (−0.42%) and health care (−0.64%) posted the day’s smallest losses. The Dow closed down 1.1%, the S&P 500 down 1.2% and the Nasdaq down 1.35% Wednesday.

Trading volume was lighter than the 30-day average, and traders, who began the day on an upbeat note, lost whatever conviction they started with, as equities traded around closing lows by noon. A few half-hearted bounces later, markets closed with a thud. Crude oil opened near $80 a barrel and closed down about $1.00. Crude traded below $78 early Thursday morning.

Before the opening bell Thursday morning, the Bureau of Labor Statistics will release its weekly report on new claims for unemployment benefits. Economists expect new claims to rise by 4,000 to 220,000 for the week ending December 24. Data for continuing claims lags by a week.

Category Dec 17 Dec 10 Dec 3 Nov 26 Nov 19
Initial Claims 216K 214K 231K 226K 241K
4-Wk Moving Avg 222K 228K 230K 229K 227K
Continuing Claims 1672K 1678K 1670K 1609K
4-Wk Moving Avg 1657K 1627K 1582K 1539K

After markets open, the U.S. Energy Information Administration will release its weekly reports on petroleum and natural gas inventories. Last week, the EIA reported that crude inventories dropped by 5.89 million barrels in the week ending December 16. The American Petroleum Institute reported late Wednesday that the crude oil inventory dropped by about 3.1 million barrels last week.

Natural gas production has been hit hard by the severe winter storm that pounded virtually the entire country last week. Production from the Appalachian Basin of Pennsylvania and Ohio fell by as much as 27% due to frozen wells and equipment. Toby Rice, CEO of EQT Corp. (NYSE: EQT), the country’s largest gas producer, told Bloomberg on Wednesday that cold weather in the Appalachian Basin cut EQT’s production by 30%, but he expects production to be back at normal levels of around 5 billion cubic feet per day by the end of the week.

Next week’s big news could be that General Electric Co.’s (NYSE: GE) health care spinoff, GE Healthcare Technologies Inc. (ticker: GEHC), will begin trading on the Nasdaq Wednesday and will join the S&P 500 index on the same day. Vornado Realty Trust will be moved to the S&P MidCap 400 on Thursday. GE shareholders will receive one share of GE Healthcare stock for every three GE shares they own.

Earlier this month, GE gave investors a peek at the new company. Revenue for the first nine months of the year totaled $13.4 billion, down from $17.59 billion for the same period in 2021. Profits, however, improved from $1.16 billion last year to $1.31 billion.

GE also has plans to combine its renewable energy, power and digital units into a separate company that will be spun off sometime in 2024.

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