ECB Stimulus Announcement Could Give Early Lift

(RTTNews) - The major U.S. index futures are pointing to a higher opening on Thursday, with sentiment suggesting that stocks may retain the buoyancy that was evident for the past two sessions. That said, since the European Central Bank announcement concerning additional stimulus was already priced in by the markets, it remains to be seen if the early buoyancy could be sustained. Earning news has been mixed, although guidance issued by some tech companies has been a cause of concern. The jobless claims report released earlier in the day showed a smaller than expected decline in claims.

U.S. stocks advanced for the third consecutive session on Wednesday, as stimulus hopes kept traders interested in stocks.

The major averages opened on a tentative note following the release of a mixed housing starts report and mixed earnings news flow. However, the averages recovered in early trading and remained above the unchanged line until late afternoon trading. After momentary weakness, the averages advanced yet again before closing modestly higher.

The Dow Industrials rose 39.05 points or 0.22 percent before closing at 17,554 and the Nasdaq Composite Index closed 12.58 points or 0.27 percent higher at 4,667, while the S&P 500 Index added 9.57 points or 0.47 percent before closing at 2,032.

Nineteen of the thirty Dow components closed higher for the session, with UnitedHealth (UNH), Caterpillar (CAT), Chevron (CVX), Intel (INTC) and United Technologies (UTX) leading the gains. On the other hand, IBM (IBM) fell over 3 percent in reaction to its financial results. Microsoft (MSFT) and Pfizer (PFE) also declined notably.

Utilities, basic material, energy, semiconductor and retail stocks moved to the upside, while biotechnology and gold stocks came under selling pressure.

Currency, Commodity Markets

Crude oil futures are easing $0.10 to $47.68 a barrel after jumping $1.31 to $47.78 a barrel on Wednesday. Gold futures, which dipped $0.50 to $1,293.70 an ounce in the previous session, are currently slipping $2.70 to $1,291 an ounce.

Among currencies, the U.S. dollar is trading at 117.67 yen compared to the 117.97 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.1563 compared to yesterday's $1.1610.

Asia

Most Asian markets advanced, thanks to the positive lead from Wall Street overnight and expectations that the European Central Bank will deliver in line with expectations. However, the South Korean and New Zealand markets bucked the uptrend.

The Japanese market ended a lackluster session modestly higher, as the yen traded on a subdued note. The Nikkei 225 average moved back and forth across the unchanged line before closing up 48.54 points or 0.28 percent at 17,329. Defensive stocks gained ground in the session, while export stocks ended mixed.

Australia's All Ordinaries hovered above the unchanged line throughout the session before ending up 23.10 points or 0.43 percent at 5,391. Energy, material, consumer and financial stocks found buying interest, while healthcare, industrial, IT and real estate stocks came under selling pressure.

Hong Kong's Hang Seng Index ended 170.05 points or 0.7 percent higher at 24,523 and China's Shanghai Composite Index added 19.73 points or 0.59 percent before closing at 3,343.

On the economic front, a report released by the Housing Industry Association showed that new home sales in Australia rose 2.2 percent month-over-month in November after declining 3 percent in October.

The monthly report on Recent Economic and Financial Developments released by the Bank of Japan showed that the central bank assessed that the domestic economy is recovering at a moderate pace but inflation is likely to slow down. The bank expects that the effects of a sales tax hike will dissipate.

Europe

European stocks opened higher but experienced volatility in early trading ahead of the European Central Bank announcement. Amid the announcement of stimulus by the central bank, stocks have turned sharply higher.

The central bank is reportedly planning to buy roughly 50 billion euros a month in bonds for at least a year to boost growth and mitigate deflationary risks.

In corporate news, Remy Cointreau reported a 1 percent drop in organic sales for the third quarter, a smaller rate of decline when compared to the second quarter. The improvement was aided by strong demand for premium products in the U.S. and an increase in sales in China. The company maintained its guidance for the full year.

The European Central Bank left its key interest rates steady at a record low for a fourth straight month. The Governing Council, led by President Mario Draghi, held the refinancing rate at a record low 0.05 percent, following the meeting in Frankfurt. The decision was in line with economists' expectations.

The bank also left the deposit rate unchanged at -0.20 percent and the marginal lending rate at 0.30 percent. The three main interest rates were lowered by 10 basis points in September. In the press briefing, Draghi announced plans to launch an expanded asset purchase program, with the size of monthly asset purchases at 60 billion per month. The central bank is set to have the program running until the second half of 2016.

U.S. Economic Reports

While the Labor Department released a report showing a modest drop in first-time claims for U.S. unemployment benefits in the week ended January 17th, initial jobless claims still came in above economist estimates.

The report said initial jobless claims fell to 307,000, a decrease of 10,000 from the previous week's revised level of 317,000. Economists had expected jobless claims to slide to 300,000 from the 316,000 originally reported for the previous week.

The Federal Housing Finance Agency is due to release its house price index for November at 9 am ET. The consensus estimate calls for a 0.3 percent month-over-month increase in the house price index following a 0.6 percent increase in October.

At 11 am ET, the Energy Information Administration is scheduled to release its customary weekly petroleum status report for the week ended January 16th.

Crude oil stockpiles increased by 5.4 million barrels to 387.8 million barrels in the week ended January 9th. Inventories were at the highest level for this time of year in at least the last 80 years.

Meanwhile, gasoline inventories increased by 3.2 million barrels and were well above the upper limit of the average range. Distillate inventories increased by 12.9 million barrels but were in the lower half of the average range.

Refinery capacity utilization averaged 93.2 percent over the four weeks ended January 9th compared to 93.8 percent over the four weeks ended January 2nd.

The Treasury Department is also due to make announcements concerning next week's auctions of 2-year, 5-year and 7-year notes at 11 am ET.

Stocks in Focus

American Express (AXP) reported above-consensus earnings for its fourth quarter, while its revenues were shy of estimates. Reports suggested that the company is looking to shed more than 4,000 jobs in 2015.

eBay (EBAY) reported better than expected fourth quarter earnings, while its revenues missed estimates. The company's full year and first quarter guidance was lackluster. The company also announced plans to eliminate 2,400 jobs.

Verizon (VZ) reported below-consensus earnings for the fourth quarter, while its revenues were ahead of estimates.

Discover Financial Services (DFS) reported below consensus results for its fourth quarter.

SanDisk (SNDK) reported fourth quarter earnings and revenues that exceeded estimates. The company also announced a new $2.5 billion worth of stock buyback program.

F5 Networks (FFIV) reported better than expected first quarter earnings, although its revenues trailed estimates. The company's second quarter guidance was weak.

Xilinx (XLNX) also reported stronger than expected third quarter earnings but its revenues were below estimates. The company also provided disappointing fourth quarter revenue guidance.

Sallie Mae (SLM0 reported fourth quarter earnings that trailed estimates and issued below consensus earnings guidance for 2015.

Logitech (LOGI) reported better than expected third quarter results but lowered its sales guidance for 2015, citing the strength of the U.S. dollar. United Rentals' (URI) fourth quarter results exceeded estimates. JB Hunt's (JBHT) reported better than expected fourth quarter earnings, while its revenues were below estimates. Union Pacific's (UNP) fourth quarter result exceeded estimates. Travelers Companies (TRV) reported better than expected fourth quarter results.

East West Bankcorp. (EWBC) reported in line fourth quarter earnings and better than expected revenues. The company's full year and first quarter guidance was positive.

Becton, Dickinson and Company (BDX) and CareFusion (CFN) announced that CareFusion shareholders approved the company's proposed merger with Becton, Dickinson and Company.

Kinder Morgan (KMI) said its board approved a 10 percent increase in its quarterly dividend to 45 cents per share and also confirmed its expectations for declaring dividends of $2 per share for 2015.

Johnson Controls (JCI) announced a joint venture agreement with Hitachi Appliances in the heating, ventilation, air conditioning and refrigeration segment.

Capital One Financial (COF), E*TRADE (ETFC), Intuitive Surgical (ISRG), KLA-Tencor (KLAC), Maxim Integrated (MXIM), Skyworks (SWKS) and Starbucks (SBUX) are among the companies due to release their quarterly results after the close of trading.