Jobless Claims Data May Add To Recent Economic Optimism

(RTTNews) - The major U.S. index futures are pointing to a higher opening on Thursday, with stocks likely to extend the upward trend seen in recent sessions. A report showing a steep drop in initial jobless claims is likely to generate some buying interest on Wall Street. The data adds to a recent string of positive reports that have generated optimism that the economic momentum is strong enough to withstand the Federal Reserve's recently announced decision to begin scaling back its stimulus program.

U.S. stocks advanced solidly in thin pre-holiday trading on Tuesday, deriving comfort from strong economic data. The major averages opened higher and advanced steadily till the close of the abbreviated session, with the Dow Industrials and the S&P 500 Index reaching new record closing highs and the Nasdaq Composite setting a new multi-year closing high. The Dow Industrials added 62.94 points or 0.39 percent before closing at 16,358 and the S&P 500 Index closed 5.33 points or 0.29 percent higher at 1,833, while the Nasdaq Composite Index ended at 4,155, up 6.51 points or 0.16 percent.

Twenty-six of the thirty Dow components closed higher and one stock ended unchanged, while the remaining three stocks declined. DuPont (DD), Microsoft (MSFT) and Caterpillar (CAT) were the biggest gainers of the session.

On the economic front, the Commerce Department reported that durable goods orders rose 3.5 percent month-over-month in November following a 0.7 percent decrease in October. Excluding transportation, new orders were up 1.2 percent. Transportation equipment orders were up 8.4 percent and machinery orders rose 3.8 percent. Orders for computers and electronic products also improved, while orders for electronic equipment and primary metals fell. Non-defense capital good orders excluding aircraft, a key measure of capital spending, surged up 4.5 percent.

A separate report showed that new home sales fell 2.4 percent month-over-month to a seasonally adjusted annual rate of 464,000 in November. Regionally, the Midwest and South saw sales declines, while the North East and West reported increases in new home sales. However, the November reading is 16.6 percent higher than a year ago. The median price of a new home was $270,900, up 4.5 percent from October. Inventories measured in terms of the months of supply came in at 4.3 months compared to 4.5 months in October.

The Federal House Finance Agency's survey showed that its house price index rose 0.4 percent month-over-month in October following a 0.2 percent increase in September. The annual increase slowed to 8.4 percent from 8.5 percent.

Commodity, Currency Markets

Crude oil futures are slipping $0.07 to $99.15 a barrel after climbing $0.31 to $99.22 on Tuesday. Gold futures, which rose $6.30 to $1,203.30 an ounce in the previous session, are currently advancing $10.50 to $1,213.80 an ounce.

Among currencies, the U.S. dollar is trading at 104.76 yen compared to the 104.38 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is valued at $1.3698 compared to Tuesday's $1.3681.

Asia

The major Asian markets that were open for trading turned in a mixed performance. However, the Australian, New Zealand, Hong Kong and Indonesian markets were closed for public holidays.

The Japanese market was supported by a falling yen amid the increase in risk appetite. The Nikkei 225 Index opened higher and rose steadily in early trading before moving roughly sideways thereafter. The index added 164.45 points or 1.03 percent before closing at 16,174, a 6-year high.

Meanwhile, China's Shanghai Composite Index opened lower and declined steadily until late trading before seeing some sideways movement. The index ended down 33.25 points or 1.58 percent at 2,073.

After holding above the unchanged line for much of the morning, South Korea's Kospi Index retreated in a late hour pullback. The index closed 2.29 points or 0.11 percent lower at 1,999.

The Taiwanese Weighted Average Index added 18.13 points or 0.21 percent before closing at 8,486. India's Sensex ended little changed.

On the economic front, a report released by Japan's Ministry of Land, Infrastructure, Transport and Tourism showed that housing starts rose a better than expected 14.1 percent year-over-year in November. At the same time, construction orders received by 50 firms rose merely 2.2 percent, marking the smallest growth in seven months.

The minutes of the Bank of Japan's November meeting revealed that policymakers were not unanimous in their outlook on achieving the 2 percent inflation target within 2 years.

At the same time, the members were hopeful consumer spending will improve on the back of an improving job market. All the same, the policy board members remained concerned about growth.

Europe

The major European markets remained closed on account of Boxing Day.

U.S. Economic Reports

Reflecting the volatility seen during the holiday season, the Labor Department released a report showing a steep drop in weekly jobless claims in the week ended December 21st following the sharp jump seen earlier in the month.

The Labor Department said initial jobless claims tumbled to 338,000, a decrease of 42,000 from the previous week's revised figure of 380,000. Economists had expected claims to drop to 340,000 from the 379,000 originally reported for the previous week.

The Energy Information Administration is scheduled to release its petroleum status report for the week ended December 20th at 11 am ET.

Crude oil stockpiles fell by 2.9 million barrels to 372.3 million barrels in the week ended December 13th. Inventories were above the upper limit of the average range.

Distillate inventories declined by 2.1 million barrels and were below the lower limit of the average range. Meanwhile, gasoline stockpiles rose by 1.3 million barrels and were above the upper limit of the average range.

Refinery capacity averaged 91.5 percent over the four weeks ended December 13th compared to 90.7 percent over the four weeks ended December 6th.

Stocks in Focus

Fidelity National Financial (FNF) announced that it has received FTC approval for its previously announced acquisition of Lender Processing Services (LPS). As part of the approval, FNF has entered into an agreement to divest an interest in or a copy of overlapping title plants in six Oregon counties within a period of five months. The company expects the deal to close on January 2nd, 2014.

Vornado (VNO) announced that its fourth quarter results will include a net loss of $130.851 million or 66 cents per share related to its 32.6 percent stake in Toys 'R' Us' third quarter results. This compares to the $73.84 million or 37 cents per share loss Vornado recorded in its year-ago results.