The major U.S. index futures are pointing to a lower opening on Thursday, with sentiment turning damp, as oil begins to turn lower. However, most other commodities are higher. Global cues are mixed, as most Asian stocks advanced, with the the exception of Japan, while the European markets were unimpressed by the Bank of England's unchanged stance and muted growth forecast. Among economic reports released ahead of the open, jobless claims rose more than expected and fourth quarter productivity fell more than expected. The dollar is mostly weaker. Earnings news continues to be mixed. With equity markets closely tracking oil's move, the direction of oil prices could be the clinching factor for the markets.
U.S. stocks ended a volatile session on Wednesday on a mixed note, with a rebound in oil prices, mixed earnings and economic data impacting sentiment.
The major averages opened higher but gave back their gains in early trading. After plunging steeply, the averages moved roughly sideways in a broad range below the unchanged line till late afternoon trading. After trimming their losses thereafter, the averages took divergent routes and closed mixed.
The Dow Industrials rallied in late trading before ending up 183.12 points or 1.13 percent at 16,337 and the S&P 500 Index added 9.50 points or 0.50 percent before ending at 1,913, while the Nasdaq Composite Index closed at 4,504, down 12.71 points or 0.28 percent.
Twenty-one of the thirty Dow components closed higher for the session, with Exxon Mobil (XOM), Chevron (CVX), DuPont (DD), Boeing (BA) and 3M Co. (MMM) leading the gains. On the other hand, Microsoft (MSFT), Intel (INTC) and Home Depot (HD) moved notably lower.
Among the sectors, resource and computer hardware stocks rallied strongly, while transportation and utility stocks also saw some strength. At the same time, retail stocks came under selling pressure.
On the economic front, ADP's survey showed that the private sector added 205,000 jobs in January following an upwardly revised gain of 267,000 jobs in December. Economists had expected an increase of 190,000 jobs for the month.
The results of the Institute for Supply Management's service sector survey showed that the sector expanded for the 72nd straight month in January. The non-manufacturing index unexpectedly fell 2.3 points to 53.5, but a reading above 50 still indicates growth.
The business activity index declined 5.6 points to 53.9, the new orders index slipped 2.4 points to 56.5 and the employment index moved down 4.2 points to 52.1, while the order backlogs index rose 2 points to 52. Ten of the non-manufacturing industries reported growth.
Markit's report released ahead of the ISM data showed that its service sector PMI fell to 53.2 in January from 54.3 in December, while economists expected a reading of 53.7.
Currency, Commodity Markets
Crude oil futures are slipping $0.10 to $32.18 a barrel after soaring $2.40 to $32.28 a barrel on Wednesday.
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The previous session's gain came amid the release of the weekly petroleum status report, which showed that crude oil stockpiles rose by 7.8 million barrels to 502.70 million barrels in the week ended January 29th. Stockpiles are still near levels not seen for this time of year in at least the last 80 years.?
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Gasoline inventories also jumped by 5.9 million barrels and were well above the upper limit of the average range.?Meanwhile, distillate inventories fell by 0.8 million barrels but remained near the upper limit of the average range for this time of the year.?
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Refinery capacity utilization averaged 88.9 percent over the four weeks ended January 29th?compared to 90.4 percent over the four weeks ended January 22nd.
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Gold futures are currently trading at $1,153.80 an ounce, up $12.50 from the previous session's close of $1,141.30 an ounce. On Wednesday, the futures climbed $14.10.
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On the currency front, the U.S. dollar is trading at 118.14 yen compared to the 117.90 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.1071 compared to yesterday's $1.1105.
Asia
Most Asian markets advanced, encouraged by the continued strength found among commodities. However, the Japanese and Taiwanese markets moved to the downside.
The Japanese market retreated, as the yen remained firm around the 118 level. The Nikkei 225 Index languished mostly below the unchanged line despite making a couple of attempts to break into positive territory. The index ended down 146.26 points or 0.85 percent at 17,045.
Food, construction, retail, textile, real estate, pharma, financial, utility and most export stocks all ended lower for the session, but resource and chemical stocks gained ground.
Among individual stocks, IHI, Panasonic, Marui Group, Hitachi and Nippon Suisan Kaisha fell steeply. Meanwhile, Sharp rallied over 15 percent amid reports that the company may be close to accepting a bailout offer from Taiwan's Hon Hai Precision.
Australia's All Ordinaries Index opened higher and advanced steadily throughout the remainder of the session. The index ended up 98.50 points or 2 percent at 5,029. Energy and material stocks were on a tear and most other sectors also advanced, although healthcare and consumer discretionary stocks moved to the downside.
Hong Kong's Hang Seng Index rallied 191.50 points or 1.01 percent before ending at 19,183 and China's Shanghai Composite closed 41.78 points or 1.53 percent higher at 2,781.
On the economic front, National Australia Bank reported that confidence among businesses in Australia improved in the fourth quarter. The business confidence index rose 3 points to 4 in the fourth quarter, but the business conditions index slipped 1 point to 9.
Europe
European stocks started higher and are held up in early trading, although amid volatility, as traders digest some domestic earnings news. However, since the mid-session, the indexes have turned lower, reacting to the Bank of England's rate decision.
In corporate news, Shell (RDS) reported a steep plunge in fourth quarter and full year profits. Credit Suisse (CS) reported a loss for its fourth quarter, hurt by trading losses and charges. Meanwhile, ING (ING) reported better than expected fourth quarter results.
Vodafone (VOD) reported higher organic service revenue, underpinned by a recovery in Europe. AstraZeneca (AZN) expects its 2016 earnings and revenues to decline, citing the loss of the patent for its cholesterol drug Crestor. The company's fourth quarter performance was lackluster. Daimler's full year performance was strong, although it said it expects growth to slow down in 2016.
On the economic front, the Bank of England policymakers unanimously decided to keep the interest rates unchanged for the first time in seven months, as Ian McCafferty abandoned his call for a hike, and also signaled that record low rates are unlikely to rise in the foreseeable future.
The U.K. central bank also downgraded its growth projections in the wake of subdued global activity and continuing fiscal consolidation. The Monetary Policy Committee, headed by Mark Carney, voted 9-0 to hold the interest rate at 0.50 percent.
The German construction sector expanded at an accelerated pace in January, according to the results of a survey by Markit. The construction sector PMI rose 1.4 points to 57.9.
Data published by the Halifax division of Lloyds Banking Group showed that house prices in the U.K. rose 9.7 percent year-over-year in January following a 9.5 percent increase in December. Economists expected 9 percent growth for the month.
U.S. Economic Reports
First-time claims for U.S. unemployment benefits rose by more than expected in the week ended January 30th.
The report said initial jobless claims climbed to 285,000, an increase of 8,000 from the previous week's revised level of 277,000. Economist had expected jobless claims to inch up to 280,000 from the 278,000 originally reported for the previous week.
Labor productivity in the U.S. fell by more than anticipated in the fourth quarter, according to a report released by the Labor Department .
The report said labor productivity dropped by 3.0 percent in the fourth quarter after climbing by 2.1 percent in the third quarter. Economists had expected productivity to decline by 1.8 percent.
Meanwhile, the Labor Department also said unit labor costs jumped by 4.5 percent in the fourth quarter following a 1.9 percent increase in the third quarter. Costs had been expected to rise by 4.4 percent.
Dallas Federal Reserve Bank President?Rob Kaplan?is set to speak on the global economy in Dallas at 8:30 am ET.
The Commerce Department is scheduled to release its factory orders report for December at 10 am ET. Economists expect a 2.8 percent month-over-month drop in factory orders.
In November, factory orders fell 0.2 percent following a 1.3 percent increase in October. Shipments and unfilled orders were up 0.2 percent each, while inventories fell 0.3 percent.
Meanwhile, durable goods orders, making up the bulk of factory orders, fell 5.1 percent in December, with orders decreasing for four of the last five months. The consensus estimate had called for a 0.6?percent?drop?in durable goods orders.?
Excluding transportation, orders were down 1.2 percent, while they were expected to remain unchanged. Transportation orders plunged 12.4 percent. Non-defense capital goods orders, excluding aircraft, considered a proxy for capital spending,?fell 4.3 percent,?and shipments of this category of goods were also down.?
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Stocks in Focus
ConocoPhilips (COP) reported a wider than expected loss for the fourth quarter and said it expects 2016 production to be flat with last year.
Boston Scientific (BSX) reported better than expected fourth quarter adjusted earnings per share and its revenues rose year-over-year. The company's 2016 guidance is in line.
Yum Brands! (YUM) reported better than expected fourth quarter adjusted earnings per share but its revenues were below estimates.
Take-two (TTWO) reported declines in third quarter adjusted earnings and revenues, although the declines were not as steep as estimated. The company raised its full year guidance and its fourth quarter guidance was positive.
GoPro (GPRO) reversed to a loss in its fourth quarter, although the loss was in line with estimates. Revenues trailed estimates. The company's first quarter and full year 2016 revenue guidance was weak.
Costco (COST) reported flat comparable store sales in January, with a 1 percent increase in the U.S. offsetting a 6 percent drop in Canada. Total sales were up 2 percent year-over-year. Fred's Inc. (FRED) reported an increase in comparable store sales for the fourth quarter of 2015 and the month of January 2016, but lowered its earnings outlook for the fourth quarter, citing deeper gross margin pressures.
Ralph Lauren (RL) reported better than expected fourth quarter adjusted earnings but its revenues missed estimates. Citing currency impact, the company lowered its 2016 guidance.
Allstate (ALL) reported better than expected fourth quarter operating income per share. XL Group's (XL) fourth quarter operating earnings beat estimates, while MetLife's (MET) operating earnings per share for the fourth quarter missed estimates. Lincoln National (LNC) also reported below-consensus operating earnings per share for the fourth quarter.
Microchip Technologies (MCHP) reported better than expected third quarter non-GAAP earnings. The company's fourth quarter guidance was in line.
MDU Resources (MDU) reported below-consensus adjusted earnings per share for 2015 and its 2016 adjusted earnings per share guidance was weak. Noble Corp. (NE) also reported disappointing adjusted earnings per share for its fourth quarter.
bebe Stores (BEBE), Callaway Golf (ELY), Deckers Outdoor (DECK), DeVry (DV), Genworth Financial (GNW), Hanesbrand (HBI), Hanover Insurance (THG), Hartford Financial (HIG), Leapfrog (LF), LinkedIn (LNKD), Lions Gate Entertainment (LGF), NETGEAR (NTGR), News Corp. (NWSA), Post (POST), Wynn Resorts (WYNN) and YRC Worldwide (YRCW) are among the companies due to release their quarterly results after the close of trading.
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