Economic Hopes Could Generate Buying Interest

(RTTNews) - The major U.S. index futures are pointing to a higher opening on Thursday, with sentiment seeing strength after the release of some solid domestic economic data and a central bank decision across the Atlantic. The European Central Bank's extremely accommodative policy stance should allay concerns about a loss of global economic momentum on hopes that central banks are ever ready to support even if the economy flails. Nevertheless, the overbought levels could introduce some caution even amid the optimism.

U.S. stocks picked up positive momentum on Wednesday amid economic hopes, although the tech space did see weakness. The major averages opened higher and saw a short spike in early trading. However, the averages gave back some ground, with the Dow Industrials and the S&P 500 Index managing to stay above the unchanged line, while the Nasdaq Composite declined below the unchanged line in late morning trading.

The Dow Industrials and the S&P 500 Index moved sideways for the rest of the session, with the Dow Industrials closing at fresh closing high. The Dow Industrials ended up 128.66 points or 0.82 percent at 15,747 and the S&P 500 Index added 7.52 points or 0.43 percent before closing at 1,771. Meanwhile, the Nasdaq Composite languished below the unchanged line for the remainder of the session before closing down 7.92 points or 0.20 percent at 3,932.

Twenty-seven of the thirty Dow components closed higher, while the remaining three stocks declined. Microsoft (MSFT) rallied 4.20 percent and Chevron (CVX) and UnitedHealth (UNH) also saw notable strength.

Utility, brokerage and gold stocks gained solid ground, while biotechnology stocks came under selling pressure.

On the economic front, the Conference Board reported that its leading economic indicators index rose 0.7 percent month-over-month in September. The coincident economic indicators index was up 0.2 percent compared to a 0.6 percent increase in the lagging economic indicators index.

The positive momentum helped the Dow set a new high yesterday and the 14-day relative strength of the index is currently at 73.09. If fears that gains are overdone generate some weakness, the index may pull back, and in that case, the key support levels to watch for around the 15,670, 15,569 and 15,452 levels.

Crude, Commodity Markets

Crude oil futures are slipping $0.54 to $94.26 a barrel after rising $1.43 to $94.80 a barrel on Wednesday.

The previous session's gains came amid the pick up in risk appetite and the release of the petroleum status report, which showed that crude oil stockpiles rose by 1.6 million barrels to 385.4 million barrels in the week ended November 1st. Inventories were above the upper limit of the average range for this time of the year.

Meanwhile, distillate stockpiles declined by 4.9 million barrels and were at the lower limit of the average range. Gasoline inventories fell by 3.8 million barrels and yet were in the upper half of the average range. Refinery capacity utilization averaged 86.6 percent over the four weeks ended November 1st compared to 86.3 percent over the four weeks ended October 25th.

Gold futures, which rose $9.70 to $1,317.80 an ounce in the previous session, are currently edging down to $15 to $1,302.80 an ounce.

Among currencies, the U.S. dollar is trading a99.32 yen compared to the 98.66 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.3344 compared to yesterday's $1.3513.

Asia

The major Asian markets closed on a mixed note, with the Japanese, Australian, Hong Kong, Chinese, New Zealand and South Korean markets retreating, while the Taiwanese, Malaysian, Indonesian and Indian market ended higher. Cautious sentiment prevailed, as the markets awaited the U.S. GDP and monthly non-farm payrolls data.

Japan's Nikkei 225 average showed nervousness in early trading before moving decisively into negative territory by late morning trading. After declining sharply in early afternoon trading, the index moved sideways below the unchanged line before closing down 108.87 points or 0.76 percent at 14,228.

Most sectors declined with the exception of some defensive stocks, as the yen strengthened in the wake of the risk aversion.

Australia's All Ordinaries languished below the unchanged line throughout the session, ending down 10.60 points or 0.20 percent at 5,415. Financial stocks declined sharply, while material stocks also came under selling pressure.

Hong Kong's Hang Seng Index closed at 22,871, down 155.91 points or 0.68 percent, and China's Shanghai Composite Index closed 10.21 points or 0.48 percent lower at 2,129.

On the economic front, the Australian Bureau of Statistics reported that the Australian economy added just 1,100 jobs in October compared to expectations for an addition of 10,000 jobs. The jobless rate edged up 0.1 percentage points to 5.7 percent in October.

A report released by the Australian Industry Group showed that its performance of construction index for Australia rose sharply to 54.4 in October from 47.6 in September, moving into expansion territory and to the best levels since April 2010.

The leading economic indicators index for Japan compiled by Japan's Cabinet Office came in at 109.5 in September, slightly ahead of the 109.4 forecast by economists.

Europe

European stocks opened lower and saw some volatility in early trading, as traders reacted to domestic earnings flow and also awaited monetary policy decisions from two major central banks from the region. However, following the release of the U.S. data and the central bank decisions in the region, the averages staged a remarkable turnaround. The European Central Bank unexpectedly lowered interest rate to new low, generating some positive sentiment among traders, while the Bank of England kept its monetary policy unchanged. In corporate news, steel giant Arcelor Mittal (MT) reported higher third quarter profits and also kept its full year forecast unchanged. Deutsche Telekom (DT) reported third quarter profits and sales that exceeded estimates, thanks to a strong performance by its T-Mobile U.S. unit.

German engineering giant Siemens (SI) reported a decline in profits for its fourth quarter, although the decline was less than expected. The company expects its 2014 profits to grow by at least 15 percent.

Auto parts maker Continental reported better than expected earnings for its third quarter and also raised its forecast for the full year. Adidas reported declines in its third quarter sales and profits.

Dutch insurer Aegon reported a decline in its third quarter profits on accounting losses, while sales improved. French bank Societe Generale reported higher profits that trailed expectations. Societe Generale and Credit Agricole agreed on an asset swap agreement as they attempt to narrow their focus. Germany's Commerzbank reported an increase in its third quarter profits.

On the economic front, a government report showed that German industrial output fell 0.9 percent month-over-month in September, belying expectations for an unchanged reading.

U.S. Economic Reports

Economic activity in the U.S. grew by more than expected in the third quarter, according to a report released by the Commerce Department on Thursday. The report said U.S. gross domestic product rose by 2.8 percent in the third quarter compared to economist estimates for an increase of 2.0 percent.

GDP growth accelerated from the 2.5 percent increase in the second quarter, reflecting a deceleration in imports and accelerations in private inventory investment and state and local government spending.

First-time claims for U.S. unemployment benefits fell for the fourth consecutive week, according to a report released by the Labor Department on Thursday, with claims coming in roughly in line with economist estimates.

The report said initial jobless claims fell to 336,000 in the week ended November 2nd, a decrease of 9,000 from the previous week's revised figure of 345,000. Economists had expected claims to dip to 335,000 from the 340,000 originally reported for the previous week.

Federal Reserve Governor Jeremy Stein is scheduled to speak at the Chicago Fed's International Banking Conference on shadow banking at 9:10 am ET. New York Federal Reserve Bank President William Dudley will speak to the Global Economic Policy Forum in New York at 1:30 pm ET.

The Federal Reserve is scheduled to release its consumer credit report for September at 3 pm ET. Economists expect outstanding consumer credit to have increased by $12 billion in September following the $13.6 billion increase in August.

Outstanding consumer credit climbed a seasonally adjusted $13.6 billion in August. Non-revolving credit tied to auto loans rose by $14.5 billion, offsetting the $0.9 billion decrease in revolving credit tied to credit cards.

Stocks in Focus

Twitter (TWTR) is set to make its debut on the Big Board and the company has priced its initial public offering of 70 million shares at $26 per share, giving the social networking site a valuation of $18 billion.

Toll Brothers (TOL) announced a deal to buy the homebuilding business of California's Shapell Industries for about $1.60 billion in cash. Separately, the company announced preliminary fourth quarter revenues of $1.04 billion, up 65 percent year-over-year and above the consensus estimate. Qualcomm (QCOM) reported fourth quarter adjusted earnings of $1.05 per share on revenues of $6.48 billion. The earnings trailed expectations, while the revenues were ahead of expectations. The company's 2014 earnings guidance was in line, while its revenues guidance was lackluster.

Prudential Financial (PRU) reported third quarter operating income of $2.94 per share on revenues of $10.82 billion. The earnings were ahead of estimates.

Rockwell Automation (ROK) announced a 12 percent increase in its quarterly dividend to 58 cents per share.

Activision Blizzard (ATVI) reported third quarter non-GAAP earnings of 8 cents per share on revenues of $657 million. The results exceeded estimates. The company lowered its fourth quarter guidance, while it upwardly revised its full year guidance. The full year guidance was in line.

CBS Corp. (CBS) reported third quarter earnings of 76 cents per share on revenues of $3.6 billion, up 11 percent year-over-year.

Checkpoint Systems (CKP) reported fourth quarter non-GAAP earnings of 22 cents per share, up from 2 cents per share last year. Net revenues rose 3.3 percent to $174.5 million. The company lowered its full year guidance.

Career Education (CECO) reported a third quarter net loss of $1.30 per share on revenues of $251.3 million. The results trailed expectations.

TwTelecom (TWTC) reported a third quarter loss of 7 cents per share on revenues of $393.2 million. The revenues were ahead of estimates.

EOG Resources (EOG) reported third quarter adjusted net income of $2.32 per share on revenues of $3.54 billion. The earnings exceeded estimates, while the revenues were shy of estimates. The company raised its full year total production growth and crude oil production targets.

IntegraLifeSciences (IART) said it has priced its previously announced public offering of 3.5 million of its common stock at $40 per share.

Allscripts-Misys Healthcare (MDRX), bebe Stores (BEBE), Groupon (GRPN), J&J Snack Foods (JJSF), Microsemi (MSCC), Monster Beverage (MNST), NVIDIA (NVDA), Priceline.com (PCLN), Scientific Games (SGMS) and Walt Disney (DIS) are among the companies due to release their quarterly results after the close of trading.