Risk Sentiment Suffers Amid Strong Data

(RTTNews) - The major U.S. index futures are pointing to a lower opening on Thursday, with sentiment reflecting uneasiness among traders about the lack of clarity on the economic outlook. Two economic readings released earlier today showed strength in labor market and a turnaround in conditions in the manufacturing sector. The Philadelphia Fed's survey, however, contradicted the findings of the New York Fed's regional survey, which showed contracting activity levels.

Commodities are higher and the dollar is weaker. Earnings from Wal-Mart offered hope for the retail spending environment. The traders may also seek clarity from the two Fed speeches scheduled for the day. Given the lackluster risk sentiment and the overbought levels of the markets, markets could languish around recent levels.   U.S. stocks rebounded on Wednesday, helped by the FOMC minutes, which revealed divided opinions among policymakers over monetary policy normalization.     The major averages opened lower and moved roughly sideways until early afternoon trading. After declining further by the mid-session, the indexes trimmed their losses ahead of the FOMC minutes and moved into positive territory following their release. Subsequently, the averages hovered mostly in positive territory, ending modestly higher.    The Dow Industrials ended up 21.92 points or 0.12 percent at 18,574, the S&P 500 Index closed 4.07 points or 0.19 percent higher at 2,182 and the Nasdaq Composite ended at 5,289, up 1.55 points or 0.03 percent.    Twenty-one of the thirty Dow components closed the session higher, while the remaining nine stocks declined. Pfizer (PFE) and 3M Co. (MMM) advanced notably, but Cisco (CSCO) fell over 1 percent ahead of the release of its quarterly results.    Among the sectors, utility stocks gained ground, while gold stocks came under selling pressure.    Currency, Commodity Markets    Crude oil is rising $0.31 to $47.10 a barrel. The September futures ended the previous session up $0.21 at $46.79 a barrel.    The gain seen in the previous session came following the release of the weekly petroleum status report for the week ended August 13th, which showed that crude oil stockpiles fell by 2.5 million barrels to 521.10 million barrels. Stockpiles were at historically high levels for this time of year.    Gasoline inventories declined by 2.7 million barrels but were well above the upper limit of the average range. Meanwhile, distillate inventories rose by 1.9 million barrels and are near the upper limit of the average range for this time of the year.    Refinery capacity utilization averaged 92.8 percent over the four weeks ended August 13th compared to 92.8 percent for the four weeks ended August 5th.    Gold futures are currently trading at $1,354.90 an ounce, up $6.10 from the previous session's close of $1,348.80 an ounce. On Wednesday, gold gained $8.10.    On the currency front, the U.S. dollar is trading at 100.39 yen compared to the 100.28 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.1314 compared to yesterday's $1.1317.   Asia    The Asian markets had a mixed outing amid a positive reaction to the dovish message of the FOMC minutes and the yen's strong rally.    The Japanese market retreated as the yen strengthened past the 100-level against the dollar. The Nikkei 225 Index opened lower and languished below the unchanged line throughout the session, ending near the lows of the day. At the close, the index was down 259.63 points or 1.55 percent at a fresh 1-week low of 16,486.    A majority of stocks declined in the session, with export stocks leading the way lower. On the other hand, some paper and resource stocks bucked the downtrend.     Australia's All Ordinaries Index gave back the gains it notched up in early trading and languished below the unchanged line for the bulk of the session. The index lost 20.80 points or 0.37 percent before ending at 5,607.    Financial, healthcare, industrial, real estate, consumer discretionary, telecom and utility stocks all ended lower, but material, IT, energy and consumer staple stocks gained ground.    China's Shanghai Composite ended down 5.44 points or 0.17 percent at 3,104. However, Hong Kong's Hang Seng Index added 223.38 points or 0.98 percent before ending at 23,023.    On the economic front, a report released by the Australian Bureau of Statistics showed that the economy added 26,200 jobs in July compared to expectations for an addition of 10,000 jobs. However, the addition was in the volatile part-time category. Nevertheless, the jobless rate edged down to 5.7 percent from 5.8 percent in June.    The Japanese Ministry of Finance reported that the nation's trade surplus came in better than expected at 513.51 billion yen in July, while economists expected a surplus of 273.2 billion yen. Exports were down 14 percent year-over-year and imports plunged 23 percent.    Europe    European stocks opened higher and was firmly in the green in early trading, reacting to the overnight FOMC minutes and positive U.K. retail sales data. However, they began to give up their gains over the course of the morning and are currently trading in a lackluster manner.   In major corporate news, Nestle reported a slowdown in its first half underlying sales growth. However, the company sees improvement in the second half. U.K. home improvement retailer Kingfisher reported better than expected second quarter sales.    On the economic front, final inflation data released by Eurostat showed that annual inflation in the eurozone rose to 0.2 percent in July from 0.1 percent in June. This was in line with the flash estimate. Core inflation was unchanged at 0.9 percent.    A separate report showed that construction output stagnated in June compared to the previous month. Annually, output rebounded by 0.6 percent compared to a 0.4 percent drop in May.    U.K. retail sales rebounded in June, according to a report released by the U.K. Office for National Statistics. U.K. retail sales rose 1.4 percent month-over-month in July following a 0.9 percent drop in June. Economists expected a mere 0.1 percent increase. Excluding auto fuel, retail sales were up a robust 1.5 percent.     The euro area current account surplus declined to a 4-month low of 28.2 billion euros in June, the European Central Bank reported. This compares to a 31.8 billion-euro surplus for May.     U.S. Economic Reports    After reporting a slight drop in first-time claims for U.S. unemployment benefits in the previous week, the Labor Department released a report showing another modest decrease in initial jobless claims in the week ended August 13th.   The report said initial jobless claims edged down to 262,000, a decrease of 4,000 from the previous week's unrevised level of 266,000. Economists had expected jobless claims to dip to 265,000

Philadelphia-area manufacturing activity has seen tenuous growth in the month of August, according to a report released by the Federal Reserve Bank of Philadelphia on Thursday.

The Philly Fed said its diffusion index for current general activity climbed to a positive 2.0 in August from a negative 2.9 in July, with a positive reading indicating growth in regional manufacturing activity. The increase by the index matched economist estimates.

The Conference Board is set to release its leading economic indicators index for July at 10 am ET. Economists expect the index to rise 0.2 percent month-over-month.     The leading economic indicators index for the U.S. rose 0.3 percent month-over-month in June, in line with estimates and reversing the 0.2 percent drop in May. The interest rate spread, unemployment claims and building permits all positively impacted the index.

New York Federal Reserve Bank President William Dudley will speak and answer questions at a press briefing about regional economic conditions in New York at 10 am ET.    The Treasury is set to make announcements concerning next week's auctions of 2-year, 5-year and 7-year notes at 11 am ET.    San Francisco Federal Reserve Bank President John Williams is scheduled to give a speech on the economic outlook in Anchorage, Alaska, at 4 pm ET. The speech will be followed by audience and media Q and A.    Stocks in Focus    Cisco Systems (CSCO) reported fourth quarter adjusted earnings per share and revenues that beat expectations. However, the company's first quarter adjusted earnings per share guidance was weak. Cisco also announced plans to trim 5,500 positions or 7 percent of its workforce.    Agilent (A) reported better than expected second quarter adjusted earnings per share, while its revenues trailed estimates. The company's full year guidance was weak. 

Wal-Mart (WMT) reported better than expected second quarter results and raised its 2017 adjusted earnings per share guidance.

Hormel Foods (HRL) raised its 2016 earnings per share guidance and said it sees earnings and sales growth in 2017. The company reported better than expected bottom line results for its second quarter.   L Brands (LB) reported above-consensus adjusted earnings per share and revenues for its second quarter. The company's third quarter and full year earnings per share guidance was also positive.    Synopsys' (SNPS) third quarter adjusted earnings per share exceeded estimates. The company also issued upbeat guidance for the fourth quarter and the full year.    Netease.com (NTES) reported better than expected second quarter results and announced a 5 cents per share increase in its quarterly dividend    NetApp (NTAP) also reported above-consensus first quarter adjusted earnings and revenues and issued in line second quarter guidance.    CACI International's (CAI) second quarter adjusted earnings per share missed estimates but revenues were ahead of expectations.    Tyco (TYC) announced an agreement to sell its security business in South Africa to Fidelity Security Group for $140 million. The deal is expected to close in the first quarter of 2017.     Teva Pharma (TEVA) announced that the European Commission has granted marketing authorization for CINQAERO, its treatment severe eosinophilic asthma, in the 28 EU countries, Norway, Liechtenstein and Iceland. The company said it expects the treatment to be available in Europe by prescription within the coming months.    Applied Materials (AMAT), DeVry Education (DV), Gap (GPS), Mentor Graphics (MENT), New York & Co. (NWY) and Ross Stores (ROST) are among the companies due to release their quarterly results after the close of trading.