Focus On Fed Speeches May Lead To Choppy Trading On Wall Street

(RTTNews) - The major U.S. index futures are pointing to a roughly flat opening on Wednesday, as traders may be reluctant to make any significant moves ahead of a slew of speeches by Federal Reserve officials. Traders are likely to keep an eye on the remarks for any hints regarding the likelihood of a rate hike before the end of the year.

U.S. stocks rebounded on Tuesday, as traders reacted positively to the first Presidential debate and a batch of lukewarm economic readings even as oil pulled back sharply.

The major averages opened higher and rose sharply in early trading. After giving back some ground, the indexes moved back to the upside before moving roughly sideways going into the close.

The Dow Industrials added 133.47 points or 0.74 percent before ending at 18,228, the S&P 500 Index closed 13.83 points or 0.64 percent higher at 2,160, and the Nasdaq Composite closed at 5,306, up 48.22 points or 0.92 percent.

Twenty-nine of the thirty Dow components ended the session higher, while one stock fell. Nike (NKE), Intel (INTC), IBM (IBM) and Microsoft (MSFT) were among the biggest gainers of the session.

Among the sectors, retail, semiconductor, banking, biotechnology and airline stocks moved to the upside, but energy, utility and gold stocks came under selling pressure.

On the economic front, the Conference Board reported that its consumer confidence index for September unexpectedly rose to post-recession high of 104.1 in September from a revised 101.8 in August. Economists had expected the index to drop to 98.8. The assessment of the labor market was upbeat. The present situation index climbed 3.2 points to 128.5, and the expectations index rose to 87.8 from 86.1.

The flash estimate released by Markit showed that its U.S. service sector PMI rose to 51.9 in September from 50.9 in August. However, the inner details were not very positive.

The Richmond Federal Reserve's manufacturing index remained in negative territory but improved to -8 in September from -11 in August.

Commodity, Currency Markets

Crude oil futures for November delivery are rising $0.23 to $44.90 a barrel after slumping $1.26 to $44.67 a barrel in the previous session. Oil has been on a see-sawing trend of late amid uncertainty surrounding OPEC production cuts.

Meanwhile, an ounce of gold for December delivery is currently trading at $1,328.40, down $2 from the previous session's close of $1,330.40. On Tuesday, gold fell $13.70.

On the currency front, the U.S. dollar is trading at 100.60 yen compared to the 100.43 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is valued at $1.1227 compared to yesterday's $1.1215. Asia

The Asian markets closed mixed yet again, although the mood was largely lackluster. While the positive close on Wall Street offered encouragement, a drop by the price of crude oil, the return of risk aversion and the resultant strength of the yen weighed on sentiment. The Australian, New Zealand, Hong Kong and Indian market advanced, but the rest of the major markets in the region ended mostly lower.

Japan's Nikkei 225 Index opened notably lower and moved roughly sideways for the rest of the session. The index ended down 218.53 points or 1.31 percent at 16,465.

Most sectors moved to the downside, with export stocks bearing the brunt of the sell-off. On the other hand, some defensive housing and food stocks advanced.

China's Shanghai Composite Index ended 10.31 points or 0.34 percent lower at 2,988.

Meanwhile, Hong Kong's Hang Seng Index, which spent the better part of the session in negative territory, recovered in the final few minutes to close up 47.75 points or 0.20 percent at 23,520.

Australia's All Ordinaries index saw some strength in early trading. However, the index moved back and forth across the unchanged line in a narrow range before ending up 6.50 points or 0.12 percent at 5,500.

Utility and consumer stocks gained ground, but energy, material, telecom and real estate stocks ended lower for the session.

On the economic front, data released by Shoko Chukin showed that confidence among small businesses in Japan rose to 47.7 in September from 46.3 in August. Economists expected a reading of 47. Manufacturing confidence improved, while confidence among non-manufacturers fell.

Europe

European stocks are seeing strength following a 3-session retreat, as bargain hunting is lending support. Oil's rebound is also proving to be a positive. The major averages in the region opened higher and have seen further upside since then.

In major corporate news, Deutsche Post DHL announced an agreement to buy UK Mail Group for 440 pence per share or 242.7 million pounds in total.

TUI AG said it is confident of delivering 12-13 percent underlying EBITA growth for the 12-months ended September 30th. The company said summer and winter 2016/2017 trading are in line with expectations.

U.K. grocer Sainsbury reported a 1.1 percent year-over-year drop in like-for-like sales for the second quarter, with total sales, excluding fuel, down 0.4 percent.

On the economic front, the results of a survey by the GfK Institute showed that confidence among German businesses is set to decline in October, hurt by terror threats and the U.K. decision to leave the European Union. The forward-looking consumer confidence index is set to fall to 10 in October from 10.2 in September. The three sub-indexes, which pertain to the month of September, all declined.

Data released by French statistical office INSEE showed that confidence among French consumers remained steady at 97, although below its long-term average of 100.

U.S. Economic Reports

The Commerce Department released a report showing that durable goods orders came in flat in the month of August. The report said durable goods orders were virtually unchanged in August after jumping by a revised 3.6 percent in July.

Economists had expected orders to pull back by about 1.4 percent compared to the 4.4 percent spike that had been reported for the previous month.

Excluding orders for transportation equipment, durable goods orders fell by 0.4 percent in August after surging up by 1.1 percent in July. The drop matched economist estimates.

The Energy Information Administration will release the weekly petroleum status report for the week ended September 23rd at 10:30 am ET.

Crude oil stockpiles fell by 6.2 million barrels to 504.6 million barrels in the week ended September 16th. Stockpiles were still at historically high levels for this time of year.

Gasoline inventories declined by 3.2 million barrels but were well above the upper limit of the average range. Meanwhile, distillate inventories rose by 2.2 million barrels, rising to well above the upper limit of the average range for this time of the year.

Refinery capacity utilization averaged 92.9 percent over the four weeks ended September 16th compared to 93 percent for the four weeks ended September 9th.

The Treasury Department is set to release the results of its auction of 7-year notes at 1 pm ET.

A host of Fed speeches are scheduled for the day. Fed Chair Janet Yellen is scheduled to gives semi-annual testimony to House Financial Services Committee on the Fed's "Supervision and Regulation of the Financial System" at 10 am ET.

At 10:15 am ET, St. Louis Fed President James Bullard will give welcoming remarks at the Community Banking in the 21st Century conference in St. Louis.

After the market close at 4:35 am ET, Cleveland Fed President Loretta Mester will speak about the economic outlook and monetary policy in Cleveland, Ohio, followed by audience and media Q&A.

Kansas City Fed President Esther George will give the opening keynote address at the bank's Forum for Minority Bankers in Kansas City at 7:15 pm ET.

Stocks in Focus

Before the start of today's trading, Paychex (PAYX) reported fiscal first quarter earnings and revenues that exceeded analyst estimates.

BlackBerry (BBRY) unexpectedly broke even for its fiscal second quarter compared to estimates for a loss. The company also raised its full-year outlook.

Nike (NIKE) reported first quarter earnings of 73 cents per share, up 9 percent year-over-year, and its revenues climbed 8 percent to $9.1 billion. The results exceeded estimates. Worldwide future orders as of August 31, 2016 were 5 percent higher and up 7 percent, excluding forex impact.

Sonic (SONC) pre-announced fourth quarter results, expecting same store sales to drop by 2 percent, reflecting a 3 percent decline in company drive-ins and a 1.8 percent decline at franchise drive-ins. The company attributed the weakness to lower than expected traffic due to lower consumer spending and competitive threats. The company expects adjusted earnings per share of $0.43 to $0.45, below the $0.46 per share consensus estimate.

Cintas (CTAS) reported above-consensus first quarter earnings from continuing operations and its revenues also exceeded estimates. The company's 2017 guidance was positive.

Array Pharma (ARRY) announced that it has commenced an underwritten public offering of $100 million worth of shares of its common stock. Separately, the company announced the pricing of the offering, which is set to $6.25 per share. The company expects gross proceeds of $115 million.

Wells Fargo (WFC) announced that its independent board has launched an investigation into the company's retail banking sales practices. Announcing pay cuts for CEO John Stumpf, the company said he would forfeit unvested equity awards valued at $41 million and forego salary during the investigation. Stumpf will also not receive a bonus for 2016, the company said. Carrie Tolstedt, the Head of Community Banking, has quit and also stands to lose the bonus for 2016, unvested equity awards valued at $19 million and severance payments.

Standard & Poor's announced that Coty (COTY) will replace Diamond Offshore Drilling (DO) in the S&P 500 Index and that Diamond Offshore will replace Polycom (PLCM) in the S&P MidCap 400 Index. Additionally, Shop Holdings (TTS) will replace Epiq Systems (EPIQ) in the S&P SmallCap 600 Index. Epiq is set to go private in a $16.50 per share all-cash deal.

Comtech Telecom (CMTL), Pier 1 Imports (PIR) and Progress Software (PRGS) are among the companies due to release their quarterly results after the close of trading.