The major U.S. index futures are pointing to a higher opening on Thursday, with sentiment being supported by positive earnings and economic data released from across the globe. An economic report released earlier in the day showed that first time claims for unemployment benefits fell in the recent reporting week, and the data should offer some comfort. That said, some apprehension may be expressed by traders ahead of tomorrow's advance second quarter GDP estimate.
U.S. stocks declined on Wednesday, as an unexpected drop in durable goods orders gave traders a reason for profit taking after the markets held up fairly well in the previous five sessions. The major averages opened lower and saw some volatility in early trading.
Thereafter, they dipped below the unchanged line, with the Dow Industrials and the S&P 500 Index moving sideways with a modest loss until late trading, while the Nasdaq Composite moved steadily lower. The release of the Beige Book did not help much, as negative commentary on growth revealed in the report intensified the selling pressure and the major averages legged down further to close weaker.
The Dow Industrials ended down 39.81 points or 0.38% at 10,498 and the S&P 500 Index closed down 7.71 points or 0.69% at 2,265, while the Nasdaq Composite Index receded 23.69 points or 1.04% to close at 2,265.
Twenty-one of the thirty Dow components closed lower, with Alcoa (AA), Boeing (BA) Bank of America (BAC), Home Depot (HD), Intel (INTC) and Merck (MRK) declining sharply. However, Verizon (VZ) and Caterpillar (CAT) saw some degree of strength.
Among the sector indexes, the S&P Retail Index slid 1%, the Philadelphia Housing Sector Index receded 3.03%, the NYSE Arca Biotechnology Index declined 1.66%, the KBW Bank Index fell 1.32% and the Philadelphia Semiconductor Index ended down 1.81%. Among other technology indexes, the NYSE Arca Disk Drive Index fell 2.95%, the NYSE Arca Computer Hardware Index moved down 1.46%, the NYSE Arca Software Index lost 1.08% and the NYSE Arca Networking Index slipped 1.47%.
On the economic front, the Commerce Department reported that durable goods orders fell 1% month-over-month in June, belying expectations for a 1% increase. Excluding transportation orders, orders were down a more modest 0.6%, with softness in primary metal, computer/electronics and machinery orders responsible for the weakness.
However, non-defense capital goods orders, excluding aircraft, rose 0.6% and are on an uptrend. Going by the strength in this core category, Commerzbank believes that the medium term outlook for the economy is slightly encouraging. The loss of momentum in the core category may have been due to the fading boost from the inventory cycle as most restocking seems to be through.
The Beige Book showed that a number of districts reporting improvement said economic activity increased modestly, while Atlanta and Chicago reported a slowdown in economic activity. Meanwhile, Cleveland and Kansas City reported steady economic activity. Several districts reported slowing or flattening manufacturing activity. Regarding retail sales, the report said demand for necessities remained strong, while sales of big-ticket items slowed.
Auto sales were also reported to be seeing a notable decline in recent weeks. The report acknowledged slowing residential real estate activity after the expiration of the homebuyer tax credit.
Currency, Commodity Markets
Crude oil futures are trading down $0.25 at $76.74 a barrel after receding $0.51 to $76.99 a barrel on Wednesday. Yesterday's weakness came amid the release of the weekly oil inventory report, which showed a 7.3 million barrel increase in crude oil stockpiles in the week ended July 23rd to 360.8 million barrels, with inventories above the upper limit of the average range.
Gasoline stockpiles edged up 0.1 million, remaining above the upper limit of the average range. Distillate inventories rose by 0.9 million barrels and were above the upper boundary of the average range. Refinery capacity averaged 90.6% over the four weeks ended July 23rd compared to 91.5% in the previous week.
An ounce of gold is currently fetching $1,165.50 an ounce, up $3.10 from yesterday's close of $1,162.40 an ounce. In the previous session, the precious metal edged up $.0.60
Among currencies, the U.S. dollar is trading at 86.895 yen compared to the 87.4655 yen it fetched at the close of New York trading on Wednesday. Against the euro, the greenback is valued at $1.3070 compared to yesterday's $1.2995.
Asia
The major Asian markets ended on a mixed note, with the major markets in the region, namely the Australian, Japanese and the South Korean markets closing lower, while the rest of the markets closed higher.
Japan's Nikkei 225 average languished in negative territory throughout the session before closing down 57.25 points or 0.59% at 9,696. Most sectors, barring electronics, electrical machinery and auto stocks, saw weakness.
After the Japanese market closed, Sony (SNE) reported a profit of its 25.74 billion yen for its fiscal first quarter compared to a loss of 37.09 billion yen last year. Revenues rose slightly to 1.661 billion yen. Despite revising its forecast for the euro-yen exchange rate to 110 yen a euro from 125 yen a euro, the company raised its profit estimate for the fiscal year to 60 billion yen from 50 billion yen.
Australia's All Ordinaries also traded below the unchanged line for the better part of the session before closing down 5.90 points or 0.13% at 4,536. Energy stocks led the decliners, with healthcare and utility stocks also showed weakness.
Meanwhile, in a central bank decision from the region, the Reserve Bank of New Zealand raised its official cash rate by 25 basis points to 3%, as expected by economists. The central bank also signaled that a more moderate tightening may be in the offing over the course of the next couple of years.
Statistics New Zealand said a trade surplus of 276 million New Zealand dollars was recorded for June compared to the 768 million New Zealand dollar-surplus in the previous month. The contraction in the surplus was mainly due to a drop in export value and a small rise in imports. This marks the sixth consecutive monthly trade surplus and the first June surplus since 2002.
Europe
The major European markets are advancing, as encouraging economic data and earnings have offered support following the mixed close yesterday. The French CAC 40 Index and the German DAX Index are advancing 0.49% and 0.60%, respectively, while the U.K.'s FTSE 100 Index is rising 0.67%.
In corporate news, Siemens (SI) reported that its third quarter earnings rose to 1.41 billion euros from 1.26 billion euros in the year-ago quarter. Sales at its core business comprising energy, industry and healthcare rose 4% to 19.17 billion euros, with orders rising 22% to 20.87 billion euros. The company reiterated its full year guidance of over 7.5 billion euros in operating profit in its core businesses.
Sanofi-Aventis (SNY) reported a 61% increase in its net profit for the second quarter to 1.71 billion euros, while sales climbed 4.6% to 7.78 billion euros. The company was tightlipped about the Genzyme (GENZ) deal many media were speculating about.
U.K. oil company Shell said its second quarter profit rose to $4.39 billion from $3.82 billion last year, as revenues rose 42% to $90.57 billion. The company also said it is accelerating its efforts to sell non-core assets valued between $7 billion and $8 billion in 2010-2011.
German chemicals giant Bayer reported a decline in its second quarter profits to 525 million euros, with the company blaming the weakness on softness in pharmaceutical and agricultural products.
On the economic front, the Nationwide Building Society reported that U.K. house prices fell 0.5% month-over-month in July after coming in unchanged in June. Economists had expected a more modest 0.3% decline. The annual house price inflation rate also fell, dropping to 6.6% from June's 8.7%.
Meanwhile, a report released by the German Federal Statistical Office said the number of individuals with employment came in at 40.3 million in June, up 131,000 from a year-ago and 41,000 higher than in the previous month. The unemployment rate calculated based on ILO standards eased to 7% in June from 7.7% in the year-ago period.
French statistical agency INSEE reported that the French producer price index remained unchanged in June compared to the previous month, while economists had estimated a 0.3% increase. The annual producer price inflation rate was 3.5%, tamer than the 3.9% rate expected by economists.
Economic NewsThe Labor Department released a report showing a modest decrease in initial jobless claims in the week ended July 24th.
The report showed that jobless claims dropped to 457,000 from the previous week's revised figure of 468,000. Economists had been expecting jobless claims to edge down to 460,000 from the 464,000 originally reported for the previous week
Stocks in Focus
Logitech (LOGI) reported a first quarter profit of 11 cents per share compared to a loss of 21 cents per share last year. Sales rose 47% to $479 million. Analysts estimated a profit of 3 cents per share on revenues of $456.50 million. The company raised its sales guidance for 2011 to $2.3 billion to $2.35 billion from about $2.3 billion, while analysts expect sales of $2.32 billion.
O'Reilly Automotive (ORLY) reported second quarter adjusted earnings of 81 cents per share, higher than 62 cents per share last year. Sales rose 10% to $1.38 billion. The results were ahead of estimates. The company estimates third quarter earnings of 69-73 cents per share and full year adjusted earnings of $2.75-$2.85 per share. Analysts estimate earnings of 72 cents per share for the third quarter and $2.77 per share for the year.
Tesoro (TSO) reported second quarter net earnings of 47 cents per share compared to a loss of 33 cents per share last year. The recent quarter's results included a one-time benefit of 17 cents per share. Revenues rose to $5.14 million from the year-ago's $4.18 billion. Analysts' estimates, which typically exclude one-time items, called for earnings of 20 cents per share on revenues of $4.59 billion.
Credit card processor Visa (V) reported third quarter earnings of 97 cents per Class A share compared to 96 cents per Class A share last year. Operating revenues rose to $2.03 billion from the year-ago's $1.65 billion, ahead of the $1.97 billion consensus estimate. The company affirmed its 2010 guidance for revenue growth at the high end of the 11%-15% range and earnings per share growth of more than 20%, while analysts estimate 15.30% revenue growth.
Lincoln (LNC) reported its second quarter operating income of 86 cents per share, higher than 79 cents per share last year. Revenues rose to $2.60 billion from $1.88 billion last year. Analysts estimated earnings of 80 cents per share on revenues of $2.59 billion.
Motorola (MOT) said its second quarter non-GAAP earnings rose to 9 cents per share, while net sales fell to $5.41 billion from the year-ago's $5.50 billion. Analysts estimated earnings of 8 cents per share on revenues of $5.19 billion. For the third quarter, the company estimates earnings of 10-12 cents per share, while analysts estimate of earnings of 10 cents per share.
Exxon Mobil (XOM) reported second quarter earnings of $1.60 per share that rose from 81 cents per share last year. On an adjusted basis, the company's earnings rose 90% to $1.60 per share. Total revenues rose to $92.49 billion from the year-ago's $74.46 billion. Analysts estimated earnings of $1.47 per share on revenues of $98.49 billion.
Other Corporate News
AstraZeneca (AZN) may see some activity after it said the FDA's cardiovascular and renal drug advisory committee has recommended that the nodal agency approve the company's investigational drug ticagrelor for the reduction of thrombotic events in patients with acute coronary syndromes.
Newmont Mining (NEM) is likely to see buying interest after it announced a 50% increase in its quarterly dividend to 15 cents per share.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.