RTTNews - U.S. stocks are set for a higher opening Thursday morning following the release of better-than-expected financial results from Dow Component Alcoa. The markets may look forward to the reporting season for some support, as traders attempt to navigate through the uncertainty.
As of 6.30 am ET, the Dow Futures were up 53 points, the S&P Futures were up 7.30 points, and the Nasdaq 100 futures were up 8.50 points.
Wednesday, stocks ended mixed amid choppy trading as traders preferred to stay away from taking positions ahead of results from Alcoa. Defensive stocks such as pharmaceuticals, retail and oil service stocks posted gains, while metals, banks, telecommunication and networking stocks saw considerable weakness.
The Dow closed up by 14.81 points or 0.2% at 8,178 and the Nasdaq rose by 1 point or 0.1% to 1,747, while the S&P 500 fell 1.47 points or 0.2% to 880.
After the markets closed, aluminum producer Alcoa reported better-than-expected results for the second quarter. The company reported a net loss for the second quarter of $454 million or $0.47 per share, compared to net income of $546 million or $0.66 per share for the year-ago quarter. Excluding restructuring charges, loss from continuing operations for the latest quarter was $256 million or $0.26 per share. Analysts expected the company report a loss of $0.38 per share for the second quarter. CEO Klaus Kleinfeld expressed hopes that stimulus measures unveiled by the U.S and Chinese Governments might help revive demand for the company's products.
A Labor Department report on the number of first time claimants for unemployment benefits is likely to be in the radar, given the linkage jobs and wage growth has got with consumer spending. Economists expect the report to reveal a decline in claims in the recent reporting week. Additionally, the results of the Treasury auction of $11 billion worth of 30-year bonds may also be closely watched.
The retail space may see some activity in reaction to the chain store sales results to be reported by the nation's retailers for the month. Early reports do not bode well, as teen apparel retailer Hot Topic (HOTT) reported disappointing same store sales for June and on the basis of the result, lowered its bottom line guidance for the second quarter.
Traders might also digest a report from the Government Accountability Office which gave a mixed account on the stimulus package unveiled to rein in the economy by the Obama Administration. This report, coupled with the admission of misreading of the economy, might throw light on the credibility and the loopholes that need immediate attention for the success of the stimulus package and subsequent revival of the economy.
Light sweet crude oil for August delivery is currently gaining $1.05 and is trading at $61.19, after declining $2.79 a barrel in the previous session to $60.14 a barrel. The dollar is trading weaker against the Euro and the Pound, but showing strength against the Japanese yen.
The European markets are trading in the green, led by energy stocks following a rebound in crude oil prices. Better-than-expected numbers from Alcoa helped mining and steel stocks prop up, on expectations of higher demand. The CAC-40 Index in France is gaining 1.17%, the DAX Index in Germany is up 1.34% and the FTSE in the UK is rising 0.77%.
On the economic front, Germany's Federal Statistical Office said in a report that the its trade surplus increased to EUR 9.6 billion in May from EUR 9.4 billion in the previous month. The Statistical Office also confirmed its preliminary estimate for consumer price and harmonized inflation figures for the month of June. The consumer price index or CPI rose 0.1% year-on-year in June after posting zero growth in May. Meanwhile, in a central bank decision to be announced shortly, the Bank of England is expected to to leave the key interest rate unchanged at a record low of 0.5%. At the same time, economists expect the BoE to raise the size of the asset purchase scheme by GBP 25 billion. The decision is due at 7.00am ET.
The Asian markets ended slightly the trading session mildly higher in reaction to Alcoa's results and a rebound in oil prices in the international market. While the markets in China, Hong Kong, Singapore and Taiwan ended in the green, the markets in Australia, Japan, and South Korea Australian, Japanese and South Korea ended in the negative territory.
Among the economic news from the region, the central bank in South Korea has left its interest rates unchanged at 2% for the fifth consecutive month amid signs of an economic recovery and stable inflation. In Australia, the Statistics Bureau revealed that unemployment rose 0.1% in June to 5.8%, the highest level since October 2003. Economists were expecting the rate to clock 5.9%.
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