Traders Turn Cautious Amid Europe Worries, Earnings
– The major U.S. index futures are pointing to a lower opening on Thursday, with sentiment likely to take a beating following yesterday’s strong gains. Banking giant JP Morgan Chase (JPM) reported a decline in its third quarter earnings, although the decline was not as worse as what analysts had expected. Internet giant Google (GOOG) is due to report its quarterly results after the markets close.
On the economic front, the weekly jobless claims declined slightly in the recent reporting week. The news may not bring cheer to the markets, given the depressed levels of the labor market. A commerce department report released earlier in the day showed that the trade deficit remained almost unchanged in August. The lack of any major positive catalysts along with underlying fears concerning Europe may keep sentiment subdued in the session.
U.S. stocks advanced on Wednesday, encouraged by the progress made on resolving Europe’s debt crisis. European Commission president Jose Manuel Barroso unveiled a roadmap for settling the lingering debt crisis and its offshoots. Barroso called upon banks to set aside to absorb any potential losses and also to suspend dividends and bonuses until the recapitalization.
The major averages opened higher and advanced steadily until late trading before paring back some of their gains. The Dow Industrials ended up 102.55 points or 0.90 percent at 11,519 and the Nasdaq Composite Index closed at 2,605, up 21.70 points or 0.84 percent, while the S&P 500 Index ended 11.71 points or 0.98 percent higher at 1,207.
Among the 30 Dow components, twenty-five stocks ended higher, with American Express (AXP), Bank of America (BAC), Disney (DIS) and JP Morgan Chase (JPM) advancing strongly. On the other hand, Alcoa (AA) fell 2.43 percent.
Financial, airline, transportation, basic material and housing stocks turned in some of the market’s best performances.
Commodity, Currency Markets
Crude oil futures are receding $1.20 to $84.37 a barrel after ending down $0.24 to $85.57 a barrel on Wednesday. A private inventory report released late Wednesday showed that crude oil stockpiles unexpectedly fell by 3.81 million barrels in the week ended October 7th. Gasoline and distillate inventories also declined in the week.
Gold futures, which fell $14.30 to $1,668.30 an ounce in the previous session, are currently slipping $5.50 to $1,677.10 an ounce.
Among currencies, the U.S. dollar is trading at 76.88 yen compared to the 77.2625 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.3733 compared to yesterday’s $1.3792.
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