The major U.S. index futures are pointing to a higher open on Thursday, with the Nasdaq futures showing a particularly strong upward move.
The Nasdaq may benefit from continued bargain hunting in the tech sector, which led to the index’s biggest single-day gain since last November on Tuesday.
Prior to the spike seen on Tuesday, the Nasdaq had entered correction territory, tumbling by more than 10 percent from the record high set last month.
The markets may benefit from optimism about the impact of more fiscal stimulus after the House passed a $1.9 trillion relief package on Wednesday. President Joe Biden is expected to sign the bill in the coming days.
Stock futures remained positive following the release of a report from the Labor Department showing first-time claims for U.S. unemployment benefits fell to a four-month low in the week ended March 6th.
The data adds to the positive picture of the labor market painted by last week’s much better than expected monthly jobs report.
However, the report has also led to a rebound by bond yields, with the ten-year yield climbing back to the unchanged line after seeing an early drop.
Traders have recently expressed concerns about higher yields, leading to considerable volatility on Wall Street over the past several sessions.
After ending Tuesday’s trading modestly higher amid a rally by tech stocks, the Dow showed a substantial move to the upside during trading on Wednesday. The blue chip index jumped to a new record closing high, although the tech-heavy Nasdaq edged slightly lower after Tuesday’s spike.
The Dow surged up 464.28 points or 1.5 percent to 32,297.02 and the S&P 500 climbed 23.37 points or 0.6 percent to 3,898.81. Meanwhile, the Nasdaq slipped 4.99 points or less than a tenth of a percent to 13,068.83.
Stocks moved mostly higher early in the session following the release of a Labor Department report showing tame consumer price inflation in the month of February.
Concerns about inflation have contributed to the recent spike in bond yields, which has resulted in considerable volatility on Wall Street in recent sessions.
Bond yields pulled back near the unchanged line following the release of the inflation data after moving modestly higher earlier this morning.
The Labor Department said its consumer price index climbed by 0.4 percent in February after rising by 0.3 percent in January. The increase in prices matched expectations.
Gasoline prices led the way higher once again, surging up by 6.4 percent in February following a 7.4 percent spike in January.
Excluding food and energy prices, core consumer prices inched up by 0.1 percent in February after coming in unchanged for two straight months. Economists had expected core prices to rise by 0.2 percent.
On an annual basis, consumer price growth accelerated to 1.7 percent in February from 1.4 percent in January but core price growth slowed to 1.3 percent from 1.4 percent.
Early buying interest may also have been generated in reaction to reports indicating the U.S. plans to buy 100 million additional doses of Johnson & Johnson’s (JNJ) Covid-19 vaccine.
The Dow saw further upside as the day progressed, while the Nasdaq gave back ground as traders once again looked to cash in on the strength in the tech sector.
Energy stocks saw considerable strength on the day, benefiting from a rebound by the price of crude oil.
Reflecting the strength in the energy sector, the Philadelphia Oil Service Index soared by 5.6 percent, the NYSE Arca Natural Gas Index spiked by 3.6 percent and the NYSE Arca Oil Index surged up by 2.6 percent.
Substantial strength was also visible among housing stocks, as reflected by the 2.8 percent jump by the Philadelphia Housing Sector Index
Toll Brothers (TOL) helped lead the sector higher after the luxury homebuilder announced a 54 percent increase in its quarterly dividend to $0.17 per share.
Banking, chemical, and telecom stocks also saw significant strength on the day, while semiconductor stocks came under pressure after helping lead the rally by stocks on Tuesday.
Commodity, Currency Markets
Crude oil futures are jumping $1.06 to $65.50 a barrel after rising $0.43 to $64.44 a barrel on Wednesday. Meanwhile, after climbing $4.90 to $1,721.80 an ounce in the previous session, gold futures are advancing $5.60 to $1,727.40 an ounce.
On the currency front, the U.S. dollar is trading at 108.56 yen versus the 108.38 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.1956 compared to yesterday’s $1.1929.
Asian stocks ended broadly higher on Thursday after the U.S. House of Representatives gave final approval to one of the largest economic stimulus measures in American history.
The landmark $1.9 trillion coronavirus relief package was passed by the House and will be signed by President Joe Biden this week, bringing the total spent on Covid relief to $5.5 trillion.
Chinese stocks led regional gains after official data showed that new bank lending in China fell less than expected in February from January.
Alleged state-backed buying also helped investors ignore ongoing tensions between Beijing and Washington over rights abuses in Hong Kong and China’s authoritarian approach towards Tibet and Taiwan.
The benchmark Shanghai Composite Index jumped 79.09 points, or 2.4 percent, to 3,436.83, while Hong Kong’s Hang Seng Index ended up 478.09 points, or 1.7 percent, at 29,385.61.
Japanese stocks rose as investors picked up growth-related companies on hopes for a stimulus-driven economic recovery. The benchmark Nikkei 225 Index climbed 175.08 points, or 0.6 percent, to 29,211.64, while the broader Topix closed 0.3 percent higher at 1,924.92.
Market heavyweight SoftBank Group advanced 1.7 percent and Uniqlo operator Fast Retailing rallied 3.4 percent.
Shipping firms outperformed, with Kawasaki Kisen surging 12.7 percent, while Nippon Yusen and Mitsui OSK rose over 7 percent each. Shinsei Bank jumped 5.5 percent after reports that the bank had acquired a 10 percent stake in Australian credit card and consumer finance company Latitude Financial Group.
Meanwhile, Australian markets hit a five-week low before ending a choppy session on a flat note. Banks ended broadly lower, while energy stocks ended on a mixed note.
Miners also turned in a mixed performance. BHP fell 1.7 percent, while Rio Tinto rose 1.1 percent and Fortescue Metals Group advanced 2.2 percent.
Gold miners Evolution and Newcrest rose about 2 percent to extend gains from the previous session. Tech stocks fell, with Afterpay losing 3.7 percent.
Travel and tourism stocks crept higher after the federal government announced a A$1.2 billion support package to revitalize the travel industry. Flight Centre Travel Group soared 9.2 percent, Webjet rallied 3.8 percent, Qantas Airways added 2.5 percent and Sydney Airport gained 2.2 per cent.
Seoul stocks rebounded as foreign investors turned buyers amid eased inflation concerns. The benchmark Kospi surged up 55.58 points, or 1.9 percent, to recover above the 3,000-point threshold after falling for five straight sessions.
Chemical, bio and tech stocks led the surge after their weeklong retreat. LG Chem surged 5.4 percent, Samsung Biologics climbed 4.4 percent and SK Hynix gained 3 percent.
European stocks are slightly higher on Thursday as tame U.S. consumer inflation data has helped ease concerns about inflation and the U.S. House of Representatives passed the $1.9 trillion coronavirus relief package.
Traders are also reacting to the European Central Bank’s latest monetary policy decision, with the ECB leaving interest rates unchanged and announcing its will step up its emergency bond purchases over the next quarter.
While the U.K.’s FTSE 100 Index is just above the unchanged line, the German DAX Index is up by 0.1 percent and the French CAC 40 Index is up by 0.2 percent.
Nokia has advanced after the Finnish telecom company struck a deal with Samsung to license patents covering its innovations in video standards.
Italian insurer Generali has also shown a notable move to the upside after saying it expects a rebound in profitability this year.
Miners Anglo American, Antofagasta and Glencore have also risen on hopes that U.S. stimulus will boost the economic recovery from the coronavirus pandemic around the world.
Online trading platform IG Group Holdings has moved sharply higher after reporting a significant rise in third-quarter revenue.
On the other hand, fashion house Hugo Boss AG has fallen after it swung to a net loss for 2020 compared with a profit for 2019.
Chemicals company Lanxess has also slumped despite posting a narrower loss for the fourth quarter of 2020.
Roche has also dropped. The Swiss drug maker said that adding its drug Actemra to Gilead Sciences’ Veklury medication did not reduce hospital stays for patients with severe Covid-19 pneumonia.
U.S. Economic Reports
Following last week’s much better than expected monthly jobs report, the Labor Department released a report on Thursday showing first-time claims for U.S. unemployment benefits fell to a four-month low in the week ended March 6th.
The Labor Department said initial jobless claims dropped to 712,000, a decrease of 42,000 from the previous week’s revised level of 754,000.
Economists had expected jobless claims to dip to 725,000 from the 745,000 originally reported for the previous week.
With the bigger than expected decrease, jobless claims fell to their lowest level since hitting 711,000 in the week ended November 7th.
At 11 am ET, the Treasury Department is scheduled to announce the details of this month’s auction of twenty-year bonds.
The Treasury is also due to announce the results of this month’s auction of $24 billion worth of thirty-year bonds at 1 pm ET.
Stocks In Focus
Shares of Bumble (BMBL) are moving sharply higher in pre-market trading after the dating service reported better than expected fourth quarter sales and providing upbeat guidance.
Movie theater chain AMC Entertainment (AMC) is also seeing significant pre-market strength after reporting fourth quarter revenues that beat estimates and expressing optimism about its ability to “get to the other side of this pandemic.”
On the other hand, shares of Cloudera (CLDR) may come under pressure after the software company reported better than expected fourth quarter results but provided disappointing guidance.
Business software giant Oracle (ORCL) is also seeing notable pre-market weakness after reporting fiscal third quarter earnings that beat estimates but weaker than expected cloud revenue.
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