The major U.S. index futures are pointing to a higher opening on Wednesday, with sentiment suggesting an extension of the uptrend witnessed in the previous session. Global cues are mixed, with Asian stocks closing mostly lower, while the European averages are trading on a mixed note. In the absence of any major economic catalysts, markets may reveal a lack of direction, although traders may derive some comfort from positive retail earnings.
U.S. stocks advanced notably on Tuesday following a lackluster performance in five sessions, as strong retail earnings and fairly encouraging economic data set in motion a wave of buying. The major averages opened moderately higher and moved sideways in the first hour of trading. Thereafter, they legged up further and rose till early afternoon trading before giving back some ground going into the close.
The Dow Industrials added 103.84 points or 1.01% to end at 10,406, while the Nasdaq Composite Index closed up 27.57 points or 1.26% at 2,209 and the S&P 500 Index ended up 13.16 points or 1.22% at 1,093.
Twenty-seven of the thirty Dow components closed the session higher, with Alcoa (AA) (up 3.30%), Boeing (BA) (up 2.47%), DuPont (DD) (up 2.55%), Home Depot (HD) (up 3.40%) and Johnson & Johnson (JNJ) (up 2.09%) showing strong advances.
Among the sector indexes, the Dow Jones Transportation Average rose 2.26%, the Dow Jones U.S. Basic Materials Average gained 2.45%, the Philadelphia Oil Service Index moved up 2.12% and the Philadelphia Housing Sector Index advanced 2.52%.
On the economic front, the Commerce Department said housing starts for July came in at a seasonally adjusted annual rate of 546,000 compared to 537,000 in the previous month. The increase was mainly in the volatile multi-family category. Meanwhile, building permits fell to 565,000.
Commenting on the data, ING said we may not have reached the end of the tunnel yet, as homebuilding activity has essentially been moving sideways for a year and a half, aside from the effects of tax credit.
In another solid report, industrial output climbed a better than expected 1% month-over-month in July following a 0.1% drop in June. Auto production climbed 9.9%, lending support to the industrial production growth. Manufacturing output was up 0.6%. Capacity utilization rose to 74.8% from June's 74.1%.
Meanwhile, the Labor Department's producer price inflation report showed that core producer prices rose 0.3% month-over-month in July. The increase was larger than the consensus estimate of 0.1%. Headline producer prices rose 0.2%, in line with expectations. Food prices were up 0.7%, although the increase only reversed some of the sharp declines in the previous months. Reflecting the pullback in gasoline prices, energy prices declined 0.9%. The spike in core consumer price inflation supports expectations that inflation is picking up gradually in core consumer prices, reducing chances of outright deflation.
Currency, Commodity Markets
Crude oil futures are receding $0.13 to $75.11 a barrel after rising $0.53 to $75.77 a barrel on Tuesday. Gold futures, which rose $0.30 to $1,228.30 an ounce in the previous session, are currently declining $1.70 to $1,226.50 an ounce.
On the currency front, the U.S. dollar is trading at 85.285 yen compared to the 85.5305 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is valued at $1.2893 compared to yesterday's $1.2885.
Asia
The major Asian markets closed Wednesday's session mostly higher, although the upward move lacked conviction amid the engulfing uncertainty on the macroeconomic front.
Japan's Nikkei 225 average remained mostly above the unchanged line throughout the the session before closing up 78.86 points or 0.86% at 9,241. A majority of stocks advanced in the session, with the exception of defensive pharma, utility and telecom stocks. Some financial and technology stocks also saw weakness.
The Cabinet Office's revised report showed that Japan's leading index rose to 99 in June from 98.6 in May. The June reading was upwardly revised by one-tenth of a point. The coincident index was left unrevised at 101.3, up from 101.2 in May, while the lagging index was revised to 83.5 from 83.4.
Australia's All Ordinaries went on a volatile ride, moving back and forth in a narrow range, before closing up merely 0.70 points or 0.02% at 4,504. Energy stocks rose sharply, helping to offset the declines in the healthcare and material spaces.
In corporate news, BHP Billiton (BHP) today launched a $38.6 hostile bid for Canada-based Potash Corp. of Saskatchewan (POT) after the latter rejected an unsolicited bid by the former.
A report released by the Westpac-Melbourne Institute showed that Australia's leading index rose 6% on an annualized basis in June, well above the long term trend of 3%. Despite the above trend growth, Westpac chief economist Bill Evans said this was the third consecutive month of slowing in the leading index growth rate after ten months of sharp acceleration. "In absolute terms the growth rate of the index is still high but it has clearly peaked," Evans said. "The growth rate of the index is still consistent with a faster pace of growth in the economy than Westpac expects."
Hong Kong's Hang Seng Index surrendered its early gains and dipped into negative territory by late morning trading. Thereafter, the index remained below the unchanged line to close down 114.70 points or 0.54% at 21,023.
Among index heavyweights, HSBC slid moderately, while China Mobile rose. Most financial, utility and property stocks came under selling pressure. On the other hand, Citic Pacific and Bank of China Hong Kong posted solid gains.
Europe
The major European markets are trading on a mixed note on Wednesday following the gains they notched up in the previous session. The French CAC 40 Index and the U.K.'s FTSE Index are moving down 0.04% and 0.39%, respectively, while the German DAX Index are gaining 0.14%.
In economic news, the minutes of the Monetary Policy Committee meeting of the Bank of England showed that eight members voted to retain the interest rate at a record low of 0.5%, while Andrew Sentance sought a 25 basis point hike. The meeting was held on August 4 and 5.
Most members thought that the current level of Bank rate and stock of asset purchases financed by the issuance of central bank reserves remained appropriate to balance the risks to the inflation outlook in the medium term.
Eurostat reported that the euro zone's construction output rose a seasonally adjusted 2.7% month-over-month in June following a revised 0.7% drop in May. On an annual basis, construction output grew 3.1% compared to the revised 6.2% drop in the previous month.
U.S. Economic News
The Energy Information Administration is scheduled to release its weekly petroleum inventory report for the week ended August 13th at 10:30 AM ET.
The inventory report for the week ended August 6th showed that crude oil stockpiles fell by 3 million barrels to 355 million barrels. Despite the decline, crude oil stockpiles remained above the upper limit of the average range.
Gasoline inventories rose by 0.4 million barrels and remained above the upper limit of the average range. Distillate inventories also rose, increasing by 3.5 million barrels. Inventories of distillate fuel remained above the upper boundary of the average range for this time of the year. Refinery capacity utilization averaged 88.1% over the four weeks ended August 6th compared to 91.2% in the previous week.
Stocks in Focus
Earnings
Analog Devices (ADI) reported third quarter earnings that increased to 65 cents per share from 55 cents per share last year. Sales rose 8% to $720 million, exceeding the $706.50 million consensus estimate. For the fourth quarter, the company estimates revenues of $740 million to $770 million and earnings of 68-72 cents. Analysts estimate earnings of 61 cents per share on revenues of $715.51 million.
La-Z-Boy (LZB) reported break-even results on a per share basis for its first quarter compared to a profit of 4 cents per share last year. The recent quarter's results included a 1 cent per share restructuring charge. Net sales were almost flat at $263.3 million. Analysts expected break-even results on revenues of $263.81 million.
Bob Evans Farms (BOBE) said its first quarter earnings per share declined to 41 cents per share from 52 cents per share last year, as sales fell 3.9% to $412.6 million. The consensus estimates called for earnings of 44 cents per share on revenues of $422.10 million. The company reaffirmed its 2011 operating earnings guidance of $105 million to $110 million and net sales guidance of $1.7 billion, in line with the consensus estimate.
Other Corporate News
Emerson (EMR) could be in focus after it said it has agreed to sell its Motor and Appliance Controls businesses to Japan's Nidec Corp. (NJ). The unit generated sales of over $800 million in 2009.
Windstream (WIN) is likely to see some activity after it said it would buy Kansas-based privately-held regional fiber transport and competitive local exchange carrier Q-Comm for $782 million. Windstream said it expects to issue $237 million in stock connection with the deal and pay $278 million in cash, while it also agreed to pay the target company's debt valued at $267 million, net of cash acquired.
Dillard's(DDS) may see buying interest after it announced that its board has authorized the buyback of up to $250 million worth of its Class A common stock.
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June 12, 2026 17:14 ET Major central bank action was the focus this week in economic news. The European Central Bank became the first major central bank to move in response to the rising inflationary pressures in the backdrop of the conflict in the Middle East. In North America, the U.S. inflation and trade data as well as Canada’s central bank decision gained attention. The Chinese trade data was the main news in Asia.