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Wall Street Buoyed By BoJ Policy Response


Wall Street appears to have regained momentum following yesterday's setback, as traders welcome a radical, though expected, policy move by the Bank of Japan. The quantitative and qualitative easing measures announced by the Japanese central bank served as reminder that the global central banks are ever ready to extend a helping hand in the eventuality of growth faltering. The markets now await two more central bank decisions across the Atlantic and the domestic weekly jobless claims report ahead of tomorrow's all important non-farm payrolls report,

As of 6:15 pm ET, the Dow futures are moving up 57 points, while the S&P 500 futures are adding 7.70 points and the Nasdaq 100 futures are gaining 13.50 points.

U.S. stocks succumbed to the negativity generated by some soft domestic economic data on Wednesday.

On the economic front, the Labor Department will release its jobless claims report for the week ended March 30th at 8:30 am ET. Economists expect a modest decline in claims to 350,000 from 357,000 in the previous week.

Chicago Federal Reserve Bank President Charles Evans and Atlanta Federal Reserve Bank President Dennis Lockhart are due to participate on a panel at the RISE 13 student investment conference in Dayton, Ohio at 8:45 am ET. Kansas City Federal Reserve Bank President Esther George is scheduled to speak on the economy in El Reno, Oklahoma at 12:30 pm ET. Additionally, Federal Reserve Vice Chair Janet Yellen will speak to the SABEW conference in Washington at 5 pm ET.

In corporate news, Compuware (CPWR) reported preliminary results that were below the consensus estimates. The company attributed the predicament to pushing behind of the deals initially estimated to close in the fourth quarter into the new fiscal years.

McCormick (MKC) said its board authorized a new share repurchase program to buy up to $400 million of its outstanding shares. Boeing (BA) could see some upside after International Airlines Group firmed up orders for 18 of its Dreamliners, which have been plagued by battery problems.

The major Asian markets ended on a mixed note, with the Japanese market staging a remarkable turnaround and ending notably higher, helped by the central bank's benevolent stance. The Malaysian and New Zealand markets also firmed up, while the South Korean, Australian, Singaporean, Indian, Indonesian and Australian markets fell steeply.

The negativity in these markets reflected nervousness that stemmed from fears concerning the U.S. jobs market, geopolitical tensions haunting the Korean peninsula and a pullback in commodity prices. Meanwhile, the Chinese, Hong Kong and Taiwanese markets remained closed on account of a public holiday.

Japan's Nikkei 225 average opened down by about 175 points and moved roughly sideways until the announcement of the central bank decision. The index recovered strongly and advanced in late trading, ending up 272.34 points or 2.20 percent at 12,635.

Bank of Japan's new Governor Haruhiko Kuroda delivered on his promise and announced quantitative and qualitative easing program. The measures, include increasing monthly Japanese government bond purchases, lengthening the maturity of bonds and replacing the main operating target of the overnight call rate with a monetary base target.

Australia's All Ordinaries ended down 47.10 points or 0.95 percent at 4,919. The market witnessed broad based weakness, with material and energy stocks retreating sharply. Industrials stocks also came under selling pressure.

Separate reports released by the Australian Bureau of Statistics showed that Australian retail sales rose more than expected in February, while building approvals for February were also ahead of expectations.

European stocks are trading on a mixed note, as traders remained anxious about the U.S. jobless claims report and the central bank decisions from the region, even as the Bank of Japan's policy move infused some hopes.

In corporate news, T-Mobile USA, Deutsche Telecom's U.S. unit reported net customer additions of 579,000 in the first quarter to 34 million. Branded customers grew 3,000 compared to a loss of 349,000 branded customers in the fourth quarter of 2012. Domino's Pizza said its like-for-like sales at its U.K. STORES were up 6.6 percent in the first quarter.

On the economic front, revised estimates released by Markit Economics showed that private sector activity in the eurozone contracted further in March. The composite purchasing managers' index fell to 46.5 from 47.9 in February, in line with the initial estimate. The service sector purchasing managers index eased to 46.4 in March from 47.9 in February.

Meanwhile, the U.K.'s service sector purchasing managers' index rose to 52.4 in March from 51.8 in February, while economists had expected a more modest improvement to 51.5.

A report released by Eurostat showed that the euro area's annual producer price inflation slowed to 1.3 percent in February from 1.7 percent in January.

by RTTNews Staff Writer

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