Plus   Neg

U.S. Stocks May Open Roughly Flat Amid Mixed Reaction To Earnings


With traders digesting the latest batch of earnings news, stocks may show a lack of direction in early trading on Thursday. The major index futures are currently pointing to a roughly flat open for the markets, with the S&P 500 futures unchanged.

Traders may be reluctant to make significant moves following the release of a mixed batch of earnings news from big-name companies like IBM Corp. (IBM), Morgan Stanley (MS), and UnitedHealth (UNH).

Shares of IBM are moving to the downside in pre-market trading after the tech giant reported second quarter earnings that beat analyst estimates but a continued decline in revenues.

Financial giant Morgan Stanley is also seeing notable pre-market weakness despite reporting second quarter results that beat analyst estimates on both the top and bottom lines.

Shares of Netflix (NFLX) are moving sharply lower in pre-market trading after the video streaming giant reported better than expected second quarter earnings but weaker than expected international subscriber growth.

On the other hand, shares of UnitedHealth are likely to see initial strength after reporting better than expected second quarter results and raising its full-year guidance.

eCommerce giant eBay (EBAY) may also move to the upside after reporting second quarter results that beat expectations and raising its profit forecast.

Some traders may stick to the sidelines ahead of the release of quarterly results from software giant Microsoft (MSFT) after the close of today's trading.

In U.S. economic news, the Labor Department released a report showing first-time claims for U.S. unemployment benefits increased in line with economist estimates in the week ended July 13th.

The report said initial jobless claims inched up to 216,000, an increase of 8,000 from the previous week's revised level of 208,000.

Economists had expected jobless claims to creep up to 216,000 from the 209,000 originally reported for the previous week.

A separate report from the Philadelphia Federal Reserve showed its reading on regional manufacturing activity jumped much more than expected in the month of July.

The Philly Fed said its diffusion index for current general activity surged up to 21.8 in July after tumbling to 0.3 in June, with a positive reading indicating growth in regional manufacturing activity. Economists had expected the index to rise to 5.0.

Shortly after the start of trading, the Conference Board is due to release its report on leading economic indicators in the month of June. The leading economic index is expected to inch up by 0.1 percent in June after showing no change in May.

Stocks moved mostly lower over the course of the trading day on Wednesday, adding to the modest losses posted in the previous session. With the drop on the day, the major averages pulled back further off Monday's record closing highs.

The major averages saw further downside going into the close, hitting new lows for the session. The Dow fell 115.78 points or 0.4 percent to 27,219.85, the Nasdaq dropped 37.59 points or 0.5 percent to 8,185.21 and the S&P 500 slid 19.62 points or 0.7 percent to 2,984.42.

In overseas trading, stock markets across the Asia-Pacific region moved notably lower during trading on Thursday. Japan's Nikkei 225 Index plunged by 2 percent, while China's Shanghai Composite Index slumped by 1 percent.

The major European markets have also moved to the downside on the day. While the French CAC 40 Index is down by 0.1 percent, the U.K.'s FTSE 100 Index and the German DAX Index are down by 0.5 percent and 0.6 percent, respectively.

In commodities trading, crude oil futures are rising $0.27 to $57.05 a barrel after slumping $0.84 to $56.78 a barrel a barrel on Wednesday. Meanwhile, an ounce of gold is trading at $1,415.90, down $7.40 compared to the previous session's close of $1,423.30. On Wednesday, gold jumped $12.10.

On the currency front, the U.S. dollar is trading at 107.94 yen compared to the 107.95 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.1217 compared to yesterday's $1.1224.

For comments and feedback contact: editorial@rttnews.com

Market Analysis

Follow RTT