The major U.S. index futures are pointing to a higher opening on Thursday, although the mood is a little nervous amid a lack of any clear direction. Jobless claims fell roughly in line with estimates and Philadelphia region's manufacturing activity expanded, according to two separate reports released earlier today. Meanwhile, signals from the minutes of the European Central Bank meeting showed that further stimulus could be expected as early as December. Despite indications of monetary policy divergence, the dollar is weaker, sending commodities higher. That said crude oil prices are pulling back.
U.S. stocks advanced on Wednesday, with firming rate hike expectations supporting interest rate sensitive sectors and geopolitical tensions driving up commodities. Some corporate tidings also generated optimism.
The major averages opened higher and moved sideways until the release of the FOMC minutes. Further buying was seen in reaction of the minutes, sending the averages steadily higher for the rest of the session.
The Dow Industrials climbed 247.66 points or 1.42 percent before ending at 17,737, the S&P 500 Index closed 33.14 points or 1.62 percent higher at 2,084 and the Nasdaq Composite ended at 5,075, up 89.19 points or 1.79 percent.
All thirty of the Dow components advanced in the session, led by Apple (AAPL), Visa (V), UnitedHealth (UNH), Nike (NKE) and JP Morgan Chase (JPM).
Among the sectors, transportation, biotechnology, resource, retail, housing and financial stocks advanced notably.
On the economic front, the Commerce Department reported that housing starts fell 11 percent month-over-month to a seasonally adjusted annual rate of 1.060 million units in October. The volatile multi-family starts fell 25 percent following a spike in September, while the retreat in single-family starts was far more moderate at 2.4 percent. Building permits rose 4.1 percent to a 1.150 million-unit rate.
Currency, Commodity Markets
Crude oil futures are sliding $0.59 to $40.16 a barrel after rising $0.08 to $40.75 a barrel on Wednesday. The most actively traded January futures are currently slipping $0.43 to $41.52 a barrel.
The previous session's performance came amid the release of the weekly petroleum status report, which showed that crude oil stockpiles rose by 0.3 million barrels to 487.3 million barrels in the week ended November 13th. Inventories remained near levels not seen for this time of year in at least the last 80 years.
Gasoline inventories rose by 1 million barrels and were well above the upper limit of the average range. However, distillate inventories fell by 0.8 million barrels but were in the middle of the average range for this time of the year.
Refinery capacity utilization averaged 89 percent over the four weeks ended November 13th compared to 88.1 percent over the four-weeks ended November 6th.
Gold futures are climbing $1.50 to $1,070.20 an ounce. In the previous session, the December futures ended at $1,068.70 an ounce, up $0.10.
Among currencies, the U.S. dollar is trading at 123.16 yen compared to the 123.64 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.0686 compared to yesterday's $1.0660.
Asia
The major Asian markets all ended higher, encouraged by the positive close on Wall Street overnight. The yen weakened in reaction to an unchanged monetary policy stance announced by the Bank of Japan, sending Japanese stocks higher for the third consecutive session.
Japan's Nikkei 225 Index opened higher and saw further upside in early trading before moving sideways. After giving back some of its gains in the afternoon, the index moved sideways yet again before ending up 210.63 points or 1.07 percent at a fresh 3-month high of 19,860.
A majority of stocks advanced in the session, led by export, financial, utility, retail and resource stocks. On the other hand, some construction and real estate stocks came under selling pressure.
Sumco, Kyowa Hakko Kirin, Dentsu, Shiseido, Nippon Electric Glass, JFE Holdings, Pioneer, Toho Zinc, Advantest, Mitsumi Electric and SCREEN Holdings were among the biggest gainers of the session. Meanwhile, Toyota, Toshiba and SoftBank fell sharply.
Australia's All Ordinaries Index hovered above the unchanged line throughout the session, ending 104.20 points or 2.01 percent higher at 5,293. Across the board buying was evident in the market.
China's Shanghai Composite Index ended at 3,617, up 48.59 points or 1.36 percent, and Hong Kong's Hang Seng Index added 311.96 points or 1.41 percent before ending at 22,500.
On the economic front, following its Monetary Policy Board meeting, the Bank of Japan announced that it is maintaining its monetary policy unchanged. The board decided by an 8-1 vote to maintain its target of raising the monetary base at an annual pace of about 80 trillion yen. Policymakers turned cautious about inflation expectations, suggesting that inflation indicators have recently shown relatively weak developments.
Japan's Ministry of Finance reported that the nation recorded a trade surplus of 111.5 billion yen in October, belying expectations for a deficit. Exports fell 2.1 percent, while imports declined a steeper 13.4 percent.
Japan's all industry activity decreased for the third straight month in September, defying economists' expectations for an increase, data from the Ministry of Economy, Trade and Industry showed. The all industry activity index fell a seasonally adjusted 0.2 percent month-over-month in September following a 0.1 percent drop in August. Construction and service sector activity contracted, while industrial output rose.
Europe
European stocks started notably higher and are sustaining their gains after yesterday's lackluster showing. Traders also digested the minutes of the European Central Bank monetary policy meeting, which showed that further stimulus is likely in December. The central bank indicated that the risk of inflation missing target is increasing.
In corporate news, German steel giant Thyssenkrupp reported strong growth in its full year profits and announced a dividend increase. Sodexo reported solid full year results but warned of a slowdown in the fiscal year ending September 2016.
On the economic front, data released by the European Central Bank showed that the euro area's current account surplus rose to an 8-month high of 29.4 billion euros in September. The surplus on goods account was 29.8 billion euros and primary income rose to 4.8 billion euros.
The U.K. Office for National Statistics reported that retail sales fell 0.6 percent month-over-month in October, steeper than the 0.5 percent drop expected by economists. Annually, sales were up a less than expected 3.8 percent. Excluding auto fuel, retail sales fell 0.9 percent month-over-month but rose 3 percent annually.
U.S. Economic Reports
First-time claims for U.S. unemployment benefits saw a modest decrease in the week ended November 14th, according to a report released by the Labor Department.
The report said initial jobless claims edged down to 271,000, a decrease of 5,000 from the previous week's unrevised level of 276,000. Economists had expected jobless claims to dip to 270,000.
Manufacturing conditions in the Philadelphia region have seen a slight improvement in the month of November, the Federal Reserve Bank of Philadelphia revealed in a report.
The Philly Fed said the diffusion index for current activity rose to a positive 1.9 in November from a negative 4.5 in October, with a positive reading indicating growth in regional manufacturing activity. The index had been expected to rise to a negative 0.5.
The Conference Board is due to release its leading economic indicators index for October at 10 am ET. Economists expect the index to increase 0.5 percent month-over-month.
The leading economic indicators index fell 0.2 percent month-over-month in September, belying expectations for an unchanged reading. Building permits, manufacturing and stocks acted as drags on the index. Meanwhile, the coincident and lagging indexes rose 0.2 percent and 0.5 percent, respectively.
The Treasury Department will make announcements concerning next week's auctions of 2-year, 5-year and 7-year notes at 11 am ET.
Atlanta Federal Reserve Bank President Dennis Lockhart is due to speak in Atlanta at 12:30 pm ET. Federal Reserve Vice Chair Stanley Fischer will speak on emerging Asia at a San Francisco Fed conference at 4:45 pm ET.
Stocks in Focus
Salesforce.com (CRM) reported above-consensus third quarter non-GAAP earnings per share and revenues. The company's fourth quarter and full year guidance was positive.
Keurig Green Mountain Coffee (GMCR) reported strong third quarter non-GAAP earnings and raised its dividend.
NetApp (NTAP) reported second quarter non-GAAP earnings per share and net revenues that beat estimates. The company's third quarter guidance is lukewarm.
L Brands' (LB) third quarter earnings exceeded estimates and its net sales rose 7 percent. Although the company's fourth quarter earnings per share guidance is weak, it raised its full year guidance.
Ctrip.com (CTRP) reported better than expected third quarter earnings per ADS and guided fourth quarter revenue growth above the consensus estimate.
Weibo (WB) also reported above-consensus non-GAAP earnings per share for its third quarter, and its revenues rose 48 percent year-over-year. The company's fourth quarter revenue guidance is in line.
SINA (SINA) reported better than expected third quarter non-GAAP earnings per share and higher revenues.
J.M. Smucker (SJM) reported better than expected adjusted earnings per share and revenues were in line. For fiscal 2016, the company raised the low end of its earnings outlook, but lowered its sales guidance.
Best Buy (BBY) reported better than expected third quarter net earnings from continuing operations but its revenues were shy of estimates. The company said it expects a negative low single digit revenue growth at enterprise level and 25-45 basis points decline in non-GAAP operating
Western Union (WU) confirmed that it is in preliminary discussions to buy Australian online payments services provider OzForex Group.
Analogic (ALOG) released preliminary first quarter results, expecting non-GAAP earnings of 55 cents per share and revenues of $115 million. The results trailed estimates. The company updated its 2016 guidance, expecting revenue growth in the low-single digits, down from its earlier guidance of mid-single digit growth.
Autodesk (ADSK), Gap (GPS), Intuit (INTU), Mentor Graphics (MENT), Ross Stores (ROST) and Williams-Sonoma (WSM) are among the companies due to release their quarterly results after the close of trading.
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