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Futures Pointing To Modestly Higher Open On Wall Street

The major U.S. index futures are pointing to a modestly higher opening on Thursday, with stocks likely to extend the strong upward move seen in the previous session.

The markets may benefit from more upbeat earnings news from retailers such as Dick's Sporting Goods (DKS), Nordstrom (JWN), and BJ's Wholesale (BJ).

Better than expected earnings from retail giants Target (TGT) and Lowe's (LOW) helped spark the rally on Wednesday, as traders expressed optimism about consumer spending.

However, Federal Reserve Chairman Jerome Powell's speech at the Jackson Hole Economic Policy Symposium on Friday may keep some traders on the sidelines.

Traders are likely to keep a close eye on Powell's speech for clues about the outlook for interest rates after minutes from the Fed's most recent meeting failed to provide much clarity.

After showing an early move to the upside, stocks remained firmly positive throughout the trading session on Wednesday. With the upward move on the day, the major averages more than offset the pullback seen on Tuesday.

The major averages pulled back off their highs of the session but held on to strong gains. The Dow jumped 240.29 points or 0.9 percent to 26,202.73, the Nasdaq advanced 71.65 points or 0.9 percent to 8,020.21 and the S&P 500 climbed 23.92 points or 0.8 percent to 2,924.43.

The initial strength on Wall Street reflected a positive reaction to the upbeat earnings news from Target and Lowe's.

Shares of Target spiked by 20.4 percent after the retailer reported better than expected second quarter results and raised its full-year earnings guidance.

Home improvement retailer Lowe's also surged up by 10.3 percent after reporting second quarter results that exceeded analyst estimates on both the top and bottom lines.

The better than expected results from the retailers added to optimism that strength in consumer spending will continue to support the U.S. economy despite early indicators of a looming recession.

Stocks remained mostly positive following the release of the minutes of the Federal Reserve's latest monetary policy meeting, which showed the central bank intends to remain flexible regarding future changes to interest rates.

Citing a lack of clarity about when the risks to the U.S. economy will be resolved, the Fed said the members plan to pay close attention to the implications of incoming data for the economic outlook.

During the meeting in late July, the members of the Fed voted 8 to 2 to lower the target range for the federal funds rate by 25 basis points to 2 to 2-1/4 percent.

The decision to lower rates came even though participants generally judged that downside risks to the outlook for economic activity had diminished somewhat since their June meeting.

However, the Fed noted that financial conditions appeared to be "premised importantly" on expectations that the central bank would cut rates.

The Fed is scheduled to hold its next monetary policy meeting September 17th and 18th, with CME Group's FedWatch Tool currently indicating at 98.1 percent chance of another 25 basis point rate cut.

The central bank is under increasing pressure to cut rates from President Donald Trump, who has repeatedly slammed Powell's approach to monetary policy in posts on Twitter.

Michael Pearce, Senior U.S. Economist at Capital Economics, said the Fed minutes left the impression policymakers are just taking their cue from the bond markets.

"We will hopefully get more clarity on future rate cuts when Powell speaks on Friday but, at this point, there is little sign that the Fed is willing to push back on the markets," Pearce said.

He added, "As such, another 25bp cut in September still looks like a good bet, if only because the Fed will not want to disappoint lofty market expectations."

On the U.S. economic front, the National Association of Realtors released a report showing a notable rebound in existing home sales in the month of July.

NAR said existing home sales jumped by 2.5 percent to an annual rate of 5.42 million in July after slumping by 1.3 percent to a revised rate of 5.29 million in June.

Economists had expected existing home sales to surge up by 2.3 percent to a rate of 5.39 million from the 5.27 million originally reported for the previous month.

With Target and Lowe's leading the way higher, retail stocks turned in some of the market's best performances on the day.

Reflecting the strength in the sector, the Dow Jones U.S. Retail Index surged up by 1.8 percent, continuing to recover from the two-month closing low set a week ago.

Significant strength was also visible among software stocks, as reflected by the 1.3 percent gain posted by the Dow Jones U.S. Software Index.

Networking, computer hardware, and biotechnology stocks also saw notable strength, moving higher along with most of the other major sectors.

Commodity, Currency Markets

Crude oil futures are climbing $0.53 to $56.21 a barrel after falling $0.45 to $55.68 a barrel on Wednesday. Meanwhile, an ounce of gold is trading at $1,506.30, down $9.40 compared to the previous session's close of $1,515.70. On Wednesday, gold closed unchanged.

On the currency front, the U.S. dollar is trading at 106.59 yen compared to the 106.62 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.1080 compared to yesterday's $1.1085.

Asia

Asian stocks turned in another mixed performance on Thursday as investors awaited cues from a key central bankers' gathering in the United States, where Federal Reserve Chairman Jerome Powell will speak for the first time since bond markets hit the recession alarm bells.

Chinese shares ended a tad higher even as the yuan hit an 11-year low against the dollar on lingering worries over a bruising trade war with the United States.

The benchmark Shanghai Composite index edged up 3.10 points, or 0.1 percent, to 2,883.44, while Hong Kong's Hang Seng Index slid 0.8 percent to 26,048.72.

Japanese shares ended roughly flat after data showed Japan's manufacturing sector shrank for a fourth consecutive month in August. Both the Nikkei 225 Index and the broader Topix gave up initial gains to end the session only marginally higher at 20,628.01 and 1,498.06, respectively.

Cosmetics maker Shiseido jumped 5.6 percent after data showed the number of foreign visitors to Japan rose an annual 5.6 percent in July. Tech stocks such as Tokyo Electron, Advantest and Screen Holdings climbed 1-3 percent.

Australian markets finished modestly higher, with energy stocks leading the advance. The benchmark S&P/ASX 200 Index inched up 18.50 points, or 0.3 percent, to 6,501.80, while the broader All Ordinaries Index ended up 20.40 points, or 0.3 percent, at 6,593.

Oil & gas giant Santos jumped 3.5 percent after its first half profit soared 89 percent on higher output from its Cooper Basin fields in South Australia. Origin Energy rallied 2.4 percent after its underlying profit surged more than 40 percent.

Australia's largest airline Qantas Airways rose 1.4 percent as it announced an A$400 million share buyback and increased dividend. Retailer Coles Group advanced 2.1 percent after announcing a special dividend.

Mining heavyweights BHP and Rio Tinto ended mixed, while South32 slumped 4.4 percent on weak earnings.

Seoul stocks fell notably to snap a three-day winning streak after the Federal Reserve's July meeting minutes cast doubt on aggressive rate cuts. The benchmark Kospi dropped 13.64 points, or 0.7 percent, to 1,951.01. Market bellwether Samsung Electronics declined 1 percent and chipmaker SK Hynix lost 2.6 percent.

Europe

European stocks have turned mixed on Thursday after minutes from the Federal Reserve's most recent meeting failed to provide clarity about further U.S. interest rate cuts.

Investors are now awaiting cues from a key central bankers' gathering in the United States on Friday, where Federal Reserve Chairman Jerome Powell will speak for the first time since bond markets hit the recession alarm bells.

Italian politics also remained in focus as the country's president meets party leaders to see if an alternative government can be formed to solve the political crisis following the collapse of M5S' previous populist coalition with the anti-immigration Lega party.

On the data front, Germany's private sector continued to underperform in August as growth in service activity was countered by a marked contraction in manufacturing, flash survey data from IHS Markit showed. On the other hand, France's private sector grew at the fastest pace in two months in the month.

The euro area composite output index unexpectedly rose to 51.8 in August from a 3-month low of 51.5 in July. Economists had forecast a score of 51.2.

While the German DAX Index has inched up by 0.2 percent, the U.K.'s FTSE 100 Index is down by 0.2 percent and the French CAC 40 Index is down by 0.4 percent.

Ambu A/S shares have plummeted after the Danish medical equipment maker cut its full-year revenue and EBIT margin guidance.

Mining giant Antofagasta has also dropped after it cautioned on the impact trade issues are having on the copper market.

On the other hand, NMC Health shares have soared in London after two groups, including one backed by China's Fosun, reportedly made competing offers to buy a 40 percent stake in the company.

Premier Oil has also advanced after it swung to a pretax profit in the first half on improved production and higher oil prices.

U.S. Economic Reports

First-time claims for U.S. unemployment benefits fell by much more than expected in the week ended August 17, according to a report released by the Labor Department.

The report said initial jobless claims dropped to 209,000, a decrease of 12,000 from the previous week's revised level of 221,000.

Economists had expected jobless claims to dip to 216,000 from the 220,000 originally reported for the previous week.

At 10 am ET, the Conference Board is due to release its report on leading economic indicators in the month of July. The leading economic index is expected to rise by 0.2 percent in July after falling by 0.3 percent in June.

The Treasury Department is scheduled to announce the details of this month's auctions of two-year, five-year, and seven-year notes at 11 am ET.

Stocks In Focus

Shares of Keysight Technologies (KEYS) are moving significantly higher in pre-market trading after the technology company reported better than expected fiscal third quarter results and provided upbeat guidance for the current quarter.

Department store chain Nordstrom (JWN) is also likely to see initial strength after reporting second quarter earnings that exceeded analyst estimates.

Shares of Dick's Sporting Goods (DKS) are also moving sharply higher in pre-market trading after the sporting goods retailer reported second quarter results that beat expectations on both the top and bottom lines.

On the other hand, shares of L Brands (LB) may move to the downside after the Victoria's Secret parent reported second quarter earnings that beat estimates but on weaker than expected sales and provided disappointing guidance.

For comments and feedback contact: editorial@rttnews.com

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