Wall Street is apparently muted in its optimism relative to its overseas counterparts, as reflected by the U.S. index futures, which are pointing to a mixed opening. Asian stocks rallied strongly, while the European markets are also trading firm amid stimulus hopes and some encouraging earnings. Given the recent gains and a lack of any major catalysts, there is no compelling reason for the markets to move further up. Some degree of consolidation is likely, as traders await some key first tier economic events due for the unfolding week.
As of 6:30 am ET, the Dow futures are slipping 22 points, the S&P 500 futures are declining 3.70 points and the Nasdaq 100 futures are moving down 1 point.
U.S. stocks advanced notably in the week ended July 27th, as rhetoric of central bank officials and political leaders allayed worries that the global economy is crumbling under the pressure of the eurozone crisis.
The FOMC meeting and the monthly non-farm payrolls report are the closely watched economic events of the unfolding week. Traders may also focus on the Commerce Department's personal income and spending report for June, the results of the Institute for Supply Management's manufacturing and service sector surveys, the ISM-Chicago's manufacturing survey, the ADP's private sector payrolls report, the Conference Board's consumer confidence index for July and the weekly jobless claims report.
The Labor Department's employment cost index for the second quarter, the S&P Case-Shiller house price index for May, monthly auto sales for July, the Commerce Department's factory goods orders for June and announcements concerning the Treasury auctions of 3-year and 10-year notes and 30-year bonds round up the economic events of the week.
The results of the manufacturing survey by the Dallas Federal Reserve are due at 10:30 am ET. Economists expect the index to drop to 2.5 in July from 5.8 in the previous month.
In corporate news, the expiration of the tender offer to acquire Talbots (TLB) by Sycamore Partners for $2.75 per share in cash has been extended to August 2nd from the initial expiry date of July 27th.
Forest Labs (FRX) appealed to shareholders to support all 10 of its nominees to the board at its upcoming annual shareholders meeting on August 15th. This comes in the wake of billionaire investor Carl Icahn's attempt to put up his candidates for 4 positions in the board.
AT&T (T) said its board has approved an increase in its stock buyback program by up to 300 million shares or 5 percent of its outstanding shares.
Anadarko Petroleum (APC), Cirrus Logic (CRUS), Cognex (CGNX), Eastman Chemicals (EMN), Fiserv (FISV), Forest Oil (FST), Hertz Global (HTZ), Hologic (HOLX), Jacobs (JEC), Partner Re (PRE), PMC-Sierra (PMCS), Post Properties (PPS) and Seagate Technology (STX) are among the companies due to release their quarterly results after the markets close.
The major Asian markets advanced for the third straight session, taking comfort from hopes that the eurozone will stay intact following promises of support by central banks and political leaders. Meanwhile, the Chinese market bucked the downtrend, with the Shanghai Composite Index slipping 0.89 percent.
Japan's Nikkei 225 average closed up 68.80 points or 0.80 percent at 8,635. Most export stocks advanced, while pharma, real estate, retail and financial stocks also firmed up.
Australia's All Ordinaries also hovered in positive territory throughout the session and ended up 32.50 points or 0.77 percent at 4,267. Hong Kong's Hang Seng Index closed at 19,585, up 310.44 points or 1.61 percent.
On the economic front, a report released by Japan's Ministry of Economy, Trade and Industry showed that Japan's industrial output fell 0.1 percent month-over-month in June. Economists had expected a 1.5 percent increase for the month. The Ministry expects output to rebound by 4.5 percent in July but decline 0.6 percent in August.
European stocks are advancing moderately amid optimism that some decisive policy action could be expected out of the week's monetary policy meetings. A joint statement released over the weekend stated that German Chancellor Angela Merkel and Italian Prime Minister Mario Monti will do everything to protect the eurozone and swiftly implement measures agreed by European leaders in June.
In corporate news, Air France-KLM reported an operating loss of 66 million euros for its second quarter, which was narrower than what most analysts had expected, while revenues rose 4.5 percent to 6.5 billion euros.
Irish low cost carrier Ryanair reported a decline in its first quarter profit to 98.8 million euros, but it affirmed its full year profit guidance.
French industrial gas maker Air Liquide reported a 5.3 percent increase in its profits for the first half. The company also maintained its outlook for an increase in its full year profits. U.K.'s Reckitt Benckiser reported a 2 percent increase in its first half profits. HSBC (HBC) reported a 10 percent increase in its first half profits.
by RTT Staff Writer
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