Wall Street is flying high on stimulus hopes, after advancing solidly in July despite all the encircling economic gloom. The index futures point to a moderately higher opening. The FOMC statement is due in the afternoon, and with great expectations surrounding the meeting, the central bank is under pressure to deliver despite the very little leeway it has got to tinker around with its policy tools. The Fed's European counterparts are due to announce their monetary policy verdicts tomorrow. The markets also have a couple of domestic economic catalysts, including a private sector job report and the ISM's national manufacturing survey that could some provide some directional cues.
As of 6:15 am ET, the Dow futures are adding 51 points, the S&P 500 futures are firming up by 5.10 points and the Nasdaq 100 futures are moving up 12.75 points.
U.S. stocks moved about in a lackluster manner on Tuesday as traders showed nervous ahead of some key economic events and apprehensions over whether the central banks will match up with their stimulus hopes.
On the economic front, the ADP National Employment report, which sheds light on non-farm private employment, is scheduled to be released at 8:15 am ET. The consensus expectations are for an addition of 120,000 jobs by the sector in July following an addition of 176,000 jobs in June.
The results of the manufacturing survey of the Institute for Supply Management, which are based on data compiled from purchasing and supply executives nationwide, are due out at 10 am ET. Economists expect the index to show a reading of 50.1 for July compared to 49.7 in June.
The Commerce Department's construction spending report to be released at 10 am ET is expected to show a 0.5 percent increase in June following a 0.9 percent increase in May.
The Energy Information Administration is scheduled to release its weekly petroleum inventory report for the week ended July 27th at 10:30 am ET.
The FOMC is scheduled to release its policy statement at 2:15 pm ET.
In corporate news, Costco Wholesale (COST) reported net sales of $7.25 billion for July, up 9 percent year-over-year. Comparable store sales rose 5 percent.
Resource Global (RECN) announced a 20 percent increase in its quarterly cash dividend.
FMC Corp. (FMC) also reported better than expected second quarter results, while its 2012 earnings guidance surrounded the consensus estimate. Career Education (CECO) reported second quarter loss that was wider than estimates, while its revenues also trailed expectations.
Genworth (GNW) reported second quarter adjusted earnings of 16 cents per share, missing the 18 cents per share consensus estimate. Revenues were in line with estimates.
Digital River's (DRIV) second quarter adjusted earnings missed estimates by a penny, while its revenues also trailed expectations. The company's third quarter and full year guidance was also weak.
Take-two (TTWO) reported a wider than expected loss for its first quarter and it issued a lackluster guidance for its second quarter and the full year. Meanwhile, Electronic Arts (EA) reported a loss on an adjusted basis for its first quarter, which however was narrower than what analysts had expected. At the same time, revenues trailed expectations
Gen-Probe (GPRO), Hartford Financial (HIG), Kilroy Realty (KRC), Lincoln National (LNC), MetLife (MET), Tesoro (TSO), Transocean (RIG), Unum Group (UNM), William Companies (WMB) and Williams Partners (WPZ) are among the companies due to release their results after the markets open.
The major Asian markets went about in a listless manner, as traders waited for clarity on monetary policy actions. Weak Chinese manufacturing data released during the day also hurt sentiment.
Japan's Nikkei 225 average languished in negative territory throughout the session before closing down 53.21 points or 0.61 percent at 8,642. Australia's All Ordinaries showed some degree of volatility, although staying mostly below the unchanged line. The index closed down 6.70 points or 0.16 percent at 4,283. Meanwhile, Hong Kong's Hang Seng Index added 23.57 points or 0.12 percent before closing at 19,820.
A report released by the Chinese Federation of Logistics and Purchasing showed that its manufacturing index edged down 0.1 points to 50.1 in July, while economists expected the index to rise to 50.5. Revised estimated released by Markit Economics' survey showed that its manufacturing index came in at 49.3 in July, suggesting contraction of the sector.
The major European markets are firming up on some positive earnings and in anticipation of stimulus support.
Final estimates released by Markit Economics showed that its manufacturing index for the eurozone slipped 1.1 points to a 37 month low of 44 in July, downwardly revised from the flash estimate of 44.1. The British manufacturing sector also contracted at the fastest pace in 38 months, with the Markit's manufacturing purchasing managers' index for the U.K. coming in at 45.4 for July.
In corporate news, French banking giant Societe Generale reported a 42 decline in its second quarter profits, partly hit by write-downs in its businesses. German healthcare company Fresenius reported a 20 percent increase in its first half profits and also confirmed its full year sales guidance. Germany's Schneider Electric said its first half operating profits rose 9 percent and also maintained its full year earnings guidance. German luxury carmaker BMW reported a decline in its second quarter profits, although the drop was not as much as analysts feared.
by RTT Staff Writer
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