Market Analysis

The major U.S. index futures are pointing to a mixed opening on Thursday despite the release of some fairly upbeat economic reports. Anxieties concerning a bailout package to Greece have exemplified, as the Troika is yet to communicate their satisfaction over the austerity measures endorsed by Greek political parties. That said, sentiment could reverse as traders savor the positive economic news out a short while ago.

A Labor Department report showed that weekly jobless claims fell sharply, and in line with recent positive housing market indicators, housing starts rose strongly. Nevertheless, much of the gains have been in the multi-family housing starts. The results of the Philadelphia Fed’s manufacturing survey may offer further clarity and set the tone for trading.

U.S. stocks retreated on Wednesday amid the release of some mixed economic data and fears about Greece being able to avail of the new bailout package.

After opening on a nervous note, the major averages took divergent routes, with the Dow moving sideways below the unchanged line, while the S&P 500 Index and the Nasdaq Composite Index moved to the upside. Ahead of the release of the FOMC minutes, the major averages began declining sharply and soon consolidated around the lower levels after the release of the minutes.

The Dow Industrials ended down 97.33 points or 0.76 percent at 12,781 and the Nasdaq Composite Index fell 16 points or 0.55 percent before closing at 2,916, while the S&P 500 Index closed at 1,343, down 7.27 points or 0.54 percent.

Twenty-five of the thirty Dow components closed lower, with Bank of America (BAC), Caterpillar (CAT) and United Technologies (UTX) declining sharply.

Transportation, oil service and retail stocks were among the biggest decliners of the session.

On the economic front, the results of the New York Federal Reserve’s manufacturing survey showed that manufacturing conditions in the region continued to improve in February. The headline business conditions index rose to 19.5 from 13.5 in January. However, the new orders index fell by 4 points compared to a 1.5-point drop by the order backlogs index. The employment index also dipped slightly. Meanwhile, the 6-month outlook index declined 4.5 points.

The Federal Reserve’s industrial production report showed that industrial output remained unchanged in January. The softness of the headline number reflected a 2.5 percent decline in utilities output. Mining output also fell 1.8 percent. Manufacturing output was up 0.7 percent, helped by 6.8 percent jump in motor vehicle output. Capacity utilization remained almost flat at 78.5 percent.

Housing readings continued to be positive. The results of a survey by the National Association of Home Builders’ showed that its housing market index rose 4 points to 29, marking the highest level since May 2007. The present conditions and future expectations indexes both rose 5 points and the index measuring prospective buyer traffic rose 1 point.

Commodity, Currency Focus

Crude oil futures are receding $0.54 to $101.26 a barrel after advancing $1.06 to $101.80 a barrel on Wednesday. Oil rose yesterday amid the release of the weekly oil inventory report, which showed that crude oil inventories edged down by 0.2 million barrels to 339.1 million barrels in the week ended February 10th. Inventories remained in the upper limit of the average range for this time of the year.

Distillate inventories fell by 2.9 million barrels and were in the middle of the average range. Meanwhile, Gasoline stockpiles rose by 0.4 million barrels, remaining in the upper limit of the average range. Refinery capacity utilization averaged 82.7 percent over the four-weeks ended February 10th compared to 82.6 percent over the previous four weeks.

Gold futures, which rose $10.40 to $1,728.10 an ounce in the previous session, are currently receding $18.90 to $1,709.20 an ounce.

Among currencies, the U.S. dollar is trading at 78.93 yen compared to the 78.44 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.3005 compared to yesterday’s $1.3066.
Asia
The major Asian stocks declined across the board, as doubts resurfaced over whether Greece will succeed in getting the bailout package.

Japan’s Nikkei 225 average fell 22.24 points or 0.24 percent before closing at 9,238 and Australia’s All Ordinaries ended down 70.20 points or 1.62 percent at 4,257.

A report released by the Australia’s statistical office showed that Australia’s jobless rate slipped 0.1 point to 5.1 percent in January. Meanwhile, the economy added more jobs than had been expected in the month.

Hong Kong’s Hang Seng Index retreated 87.95 points or 0.41 percent to 21,277.

Europe

The European markets are also retreating, with Germany’s DAX down over 0.70 percent, while the French CAC 40 Index and the U.K.’s FTSE 100 Index are also declining moderately.

In corporate news, French bank Societe Generale reported a decline in its fourth quarter net income to 100 million euros from 874 million euros in the year-ago period, with the results weighed down by write downs related to its sovereign debt and weak trading revenues. Insurer Axa reported a sharp drop in its fourth quarter net income, also impacted by its holding of Greek assets.
U.S. Economic Reports

While the Commerce Department released a report showing that U.S. housing starts came in higher than expected in the month of January, the growth was largely due to strength in the volatile multi-family home sector.



The report showed that housing starts rose 1.5 percent to an annual rate of 699,000 in January from the revised December estimate of 689,000. Economists had expected housing starts to increase to 675,000 from the 657,000 originally reported for the previous month.

New construction of multi-family homes jumped by 14.4 percent to an annual rate of 175,000, while single-family housing starts fell 1.0 to an annual rate of 508,000.

U.S. initial unemployment claims fell more than expected according to figures released by the Labor Department. DOL figures put the new jobless claims at a seasonally adjusted level of 348,000 for the week ending February 11, a drop of 13,000 from the previous week's revised level of 361,000.



And while the previous week's level was revised up from the 358,000 initially reported it still came in well below the increase to 365,000 expected by most economists. The level of new jobless claims for the week marks the lowest level since March 8 2008.

Producer prices for finished goods increased less than expected in January according to figures released by the Labor Department. The Producer Price Index, one of several indicators followed by those watching inflationary pressures on the economy, increased 0.1 percent, somewhat reversing the 0.1 percent decline posted in December.



Most economists had predicted a larger increase in the PPI, forecasting a 0.4 percent rebound in prices. Outside of the volatile food and energy sectors, the "core" producer price index edged up 0.4 percent in January, more than the 0.2 percent increase predicted by most economists.

The results of the Philadelphia Federal Reserve's manufacturing survey are due out at 10 am ET. Economists expect the diffusion index of current activity to show a reading of 9.5 for February.



The Philadelphia Federal Reserve's manufacturing survey for January showed that manufacturing conditions expanded at a faster rate during the month. The business conditions index based on the survey rose to 7.3 in January from a revised reading of 6.8 in December. The new orders index fell 3.8 points to 6.9 and the shipments index was down 3.4 points to 5.7, while the unfilled orders index suggested a contraction with a reading of -4.1 compared to December's 5.1.

Inventories saw some improvement but remained weak. Both the employment indexes improved from the month-ago levels. Meanwhile, the 6-month outlook index improved to 49 from December's 40.

Federal Reserve Chairman Ben Bernanke is scheduled to speak to the FDIC's "Future of Community Banking Conference" along with Acting FDIC Director Martin Gruenberg, in Arlington, Virginia, at 9 am ET.

Stocks in Focus

CBS (CBS) reported fourth quarter adjusted earnings of 57 cents per share on revenues of $3.78 billion. The earnings exceeded estimates, while the revenues were below estimates.

Blue Nile (NILE) said its fourth quarter net income declined to 30 cents per share, missing the 42 cents per share consensus estimate. Net sales also trailed expectations. The company issued 2012 earnings guidance that was below estimates, while its revenue guidance was in line with estimates.

Marriott International (MAR) reported fourth quarter adjusted earnings of 46 cents per share, a penny below estimates. Revenues were at $3.69 billion, almost flat with last year and missing the consensus estimate. The company’s fiscal year 2012 earnings guidance surrounded the consensus estimate.

Clearwire’s (CLWR) fourth quarter loss widened from last year and was also bigger than what analysts expected. The company’s 2012 revenues guidance trailed estimates.

MEMC Electronics’ (WFR) fourth quarter non-GAAP net loss came in at 9 cents per share compared to the loss of 4 cents expected by economists. The company’s non-GAAP revenues were also below estimates.

Avis Budget (CAR) reported a wider loss for its fourth quarter, which however was in line with estimates, while revenues trailed estimates.

NetEase.com (NTES) reported better than expected fourth quarter results.

NetApp’s (NTAP) third quarter adjusted earnings and revenues were in line with estimates. The company also issued healthy guidance for its fourth quarter.

Graphics chipmaker Nvidia (NVDA) reported better than expected fourth quarter earnings and revenues, while its first quarter revenue guidance was below estimates.

DIRECTV’s (DTV) fourth quater profit and revenues increased from the year-ago quarter and were above Wall Street view. In addition, the company announced approval of an additional $6 billion buyback authorization.

General Motors (GM) reported fourth quarter profit that was flat with previous year quarter. Revenue rose from the year-ago quarter

Baidu (BIDU), Applied Materials (AMAT), BJ Restaurants (BJRI), Blue Coat (BCSI), Cloud Peak Energy (CLD), DaVita (DVA), Nordstrom (JWN) and SunPower (SPWR) are among the companies scheduled to report their quarterly results after the markets close.