Fears have taken hold of the markets on Thursday despite very little expectations out of the 2-day EU meeting beginning in Brussels later today. The U.S. index futures point to a notably lower opening on Thursday. The results of a bond auction by Italy were in line with the recent trend of rising borrowing costs, yet demand remaining fairly firm. The U.S. jobless claims report due to be released before the markets may open may set the tempo for the opening moves even as eurozone debt fears remain the undercurrent.
As of 6:15 am ET, the Dow futures are down 82 points, while the S&P 500 futures are slipping 7.70 points and the Nasdaq 100 futures are declining 13.25 points.
U.S. stocks extended its gains on Wednesday after a couple of domestic economic reports encouraged traders to pick up stocks despite the eurozone debt threat.
On the economic front, the Bureau of Economic Analysis is due to release its final estimate of first quarter GDP at 8:30 am ET. Economists expect GDP growth to be left unrevised at 1.9 percent.
The Labor Department is due to release its customary jobless claims report for the week ended June 23rd at 8:30 am ET. Economists expect claims to edge down to 385,000 in the recent reporting week from 387,000 in the previous week.
In corporate news, Paychex (PAYX) reported fourth quarter earnings that came in line, while its revenues missed estimates. For 2013, the company expects net income growth of 5-7 percent and service revenue growth of 5-6 percent.
Hutchinson Technology (HTCH) announced third quarter net sales of $60 million, lower than $65.5 million last year, as shipments came in at 100 million suspension assemblies, lower than its guidance of 105 million to 115 million. Analysts estimate revenues of $70.30 million for the quarter.
Herman Miller's (MLHR) fourth quarter results trailed estimates, while its first quarter guidance surrounded the consensus estimates. Meanwhile, the company increased its quarterly dividend to 9 cents per share from $0.022 per share.
Pacific Ethanol (PEIX) announced that it intends to offer units consisting of common stock and warrants in an underwritten public offering.
Harman International (HAR) announced that its board has approved an increase in its annual cash dividend to 60 cents per share, translating to a quarterly rate of 15 cents per share compared to its previous dividend of $0.075 per share.
Wendy's (WEN) announced preliminary second quarter same store sales growth of 3 percent for Wendy's North America company-operated restaurants. The company also reaffirmed its 2012 adjusted EBITDA from continuing operations guidance of $320 million to $335 million.
Red Hat (RHT) announced a deal to buy FuseSource from Progress Software (PRGS). Meanwhile, Progress Software reported second quarter results that exceeded expectations. For the third quarter, the company expects core revenues of $90 million to $95 million. The company also reiterated its full year core revenue growth of 5 percent on a constant currency basis.
Accenture (ACN), Nike (NKE), Research In Motion (RIMM), Smith & Wesson (SWHC) and TIBCO Software (TIBX) are among the companies due to release their quarterly results after the markets close.
The major Asian markets end mixed ahead of the EU summit, as the positive lead from the U.S. overnight and positive Japanese retail sales data allayed some of the misgivings surrounding what is likely to emerge out of the EU summit.
Japan's Nikkei 225 average closed up 143.62 points or 1.65 percent at 8,874, its highest level since May 17th. A majority of stocks advanced, with financial, real estate and utility stocks leading the gains. Mining stocks came under selling pressure.
After showing volatility, Australia's All Ordinaries closed up 1.60 points or 0.04 percent at 4,086.
Meanwhile, Hong Kong's Hang Seng Index retreated in a late hour sell-off, closing down 151.68 points or 0.79 percent at 19,025. The Indian, Chinese, Indonesian, Taiwanese and Malaysian markets closed lower, while the New Zealand, Singaporean and South Korean markets advanced.
The major European averages have reversed course and are trading notably lower, as disappointing German employment data and apprehensions ahead of the EU summit weighed on sentiment.
On the economic front, a report released by the German Federal Labor Agency showed that the number of unemployed people in German rose by 7,000 in June from the previous month. Economists expected a more modest 3,000 increase. At the same time, the unemployment rate remained unchanged at 6.8 percent.
The results of a series of surveys by the European Commission showed that confidence waned in the eurozone region. The business climate index fell to -0.94 in June from -0.79, the economic sentiment index declined to 89.9 from 90.5 and the consumer confidence worsened to -19.8 from -19.3.
Separately, the U.K. Office for National Statistics released its revised first quarter GDP report, which confirmed the 0.3 percent GDP decline estimated initially. With the economy having now contracted for the second straight quarter, it has re-entered the recession territory.
by RTT Staff Writer
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