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| | US Market | The major U.S. index futures are pointing to a higher opening on Thursday, with sentiment suggesting that stocks may stage a rebound, as traders digest another raft of earnings and mixed economic data. Earnings news continued to be mixed, while separate economic reports released earlier in the day showed that jobless claims rose more than expected, while fourth quarter growth came in line with estimated. More data is to follow in the form of pending home sales due shortly after the markets open. The fairly benign catalysts could aid some degree of bargain hunting, although an extension of the lean trend cannot be ruled up, if pent up discontentment over the Fed decision returns to haunt investors.
U.S. stocks moved back to the downside on Wednesday, retreating sharply amid the FOMC announcement, as a lack of clarity on the pace of stimulus trimming exerted downward pressure on stocks. The major averages opened lower and moved roughly sideways until the FOMC announcement. With the Fed toeing in line with its recent stance of withdrawing stimulus at a measured pace, the averages came under further selling in the afternoon and closed notably lower.
The Dow Industrials ended down 189.77 points or 1.19 percent at 15,739, the S&P 500 Index closed 18.30 points or 1.02 percent lower at 1,774, and the Nasdaq Composite Index ended at 4,051, down 46.53 points or 1.14 percent.
Seventeen of the thirty Dow components closed lower, with Boeing slumping 5.33 percent in reaction to its earnings. Caterpillar , Disney , Home Depot and Coca-Cola also declined sharply. On the other hand, NIKE rose 1.08 percent.
Transportation, financial, retail and Oil service stocks pulled back notably, while Gold stocks gained ground.
The FOMC statement showed that the central bank now viewed that economic growth has picked up in recent quarters. The labor market commentary was maintained, while household spending and business fixed investment are reported to have advanced more quickly in recent months, an improvement from the Fed's previous assessment that they merely advanced. Most of the remaining statement was repeated. In line with its recently adopted approach, the Fed announced the next $10 billion reduction to its bond buying program, as it stayed nonchalant about the brewing turbulence among emerging market currencies. The size of the Federal Reserve's QE now stands at $65 billion per month.
The Fed's apathy towards the market turmoil led to a plunge by The Dow Industrials yesterday that took it below its key 100-day MA (currently at 15,774.) With the level currently serving as a resistance, the index could attempt to break through it if risk appetite returns. Further upward, the index also has resistances around 15,832, 15,884, 15,963 and 16,026. On the downside the index has support around 15,613, 15,670 and 15,550.
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| | US Economic Reports |  | | CADUSD | Oil | Gold | Allbanc |  |  |  |  | | Please click on the images to view our interactive charts | | | First-time claims for U.S. unemployment benefits increased by more than expected in the week ended January 25th, according to a report released by the Labor Department.
The report said initial jobless claims climbed to 348,000, an increase of 19,000 from the previous week's revised figure of 329,000. Economists had expected jobless claims to edge up to 330,000 from the 326,000 originally reported for the previous week.
While The Commerce Department released a report showing a slowdown in the pace of U.S. economic growth in the final three months of 2013, the increase still matched economist estimates.
The Commerce Department said gross domestic product increased by 3.2 percent in the fourth quarter compared to the 4.1 percent growth seen in the third quarter. The GDP growth came in line with the expectations of most economists.
The growth primarily reflected positive contributions from consumer spending, exports, non-residential fixed investment, private inventory investment, and state and local government spending.
The GDP increased by 4.1 percent in the third quarter compared to the 3.6 percent growth estimated earlier this month. Economists had expected the pace of GDP growth to be unrevised.
The National Association of Realtors will release its pending home sales index for December at 10 am ET. Economists estimate pending home sales to have declined 0.5 percent month-over-month in December.
The pending home sales index edged up a less than expected 0.2 percent month-over-month in November. On a year-over-year basis, the index was down 1.6 percent. Pending home sales fell in the Northeast and Midwest, while pending home sales rose in the South and the West.
The Treasury is set to announce the results of the auction of 5-year and 7-year notes at 11:30 am ET and 1 pm ET, respectively.
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| | Stocks in Focus | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  |  |  |  | | Please click on the images to view our interactive charts | | | Facebook reported better than expected results for its fourth quarter, helped by strong mobile ad revenue growth. Chipmaker Qualcomm reported first quarter earnings that were ahead of estimates, while its revenues missed expectations. The company raised its full year earnings guidance, which was in line with estimates. However, the company's second quarter guidance was weak.
Exxon Mobil's fourth quarter earnings were below estimates. Meanwhile, peer ConocoPhillips reported better than expected earnings for its fourth quarter.
Eli Lilly's results were also ahead of estimates. Meanwhile, UPS issued weak earnings outlook for 2014 after reporting fourth quarter earnings that beat estimates but revenues below expectations.
Symantec reported third quarter earnings and revenues that came in ahead of estimates. The company issued strong earnings and revenue guidance for 2014.
Las Vegas Sands reported fourth quarter earnings that beat estimates, while its revenues were below expectations. Flextronics' third quarter results exceeded estimates. Lam Research's second quarter results also beat estimates and the company's guidance for the third quarter was upbeat.
Callaway Golf reported a loss for its fourth quarter that was wider than estimates, while its revenues were ahead of estimates. The company's full year revenue guidance was lukewarm.
FIS announced a 9 percent increase in its quarterly dividend to 24 cents per share.
Google announced a deal to sell its Motorola Mobility smartphone business to Lenovo for $2.91 billion. Meanwhile, Google will maintain ownership of the vast majority of the Motorola Mobility patent portfolio, although as part of its ongoing relationship with Google, Lenovo will receive a license to this rich portfolio.
Amazon.com , Broadcom , Celestica , Chipotle Mexican Grill , Computer Sciences , Emulex (ELX), Google , JDS Uniphase , Manitowoc (MTW), Netsuite (N), PMC-Sierra , Reinsurance Group of America , Tellabs , Tuesday Morning , Unisys and Wynn Resorts are among the companies due to release their quarterly results after the close of trading.
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| | European Market | | After a shaky start, European stocks moved decisively lower, as traders digest domestic earnings and economic data and the cues from Asia. However, following the release of U.S. data, the averages have recouped some of their losses and are currently mixed.
In corporate news, B/E Aerospace reported higher earnings and revenues for its fourth quarter. For 2014, the company expects adjusted earnings of $4.25 per share on revenues of $4 billion.
Ericsson's reported fourth quarter earnings that missed estimates by most analysts and flat revenues. Infineon reaffirmed its second quarter revenue growth forecast after reporting first quarter adjusted operating earnings that beat estimates.
Swiss drug giant Roche's 2013 core earnings trailed estimates, while it expects revenues to rise by a low to mid-single-digit percentage. Shell reported fourth quarter adjusted earnings in line with its negative pre-announcement, with the quarterly profits hitting the lowest in 5 years. The company said it would seek disposals and make efforts to improve cash flows.
On the economic front, data released by the Federal Statistical Office revealed that the seasonally adjusted German unemployment rate came in at 5.1 percent in December, unchanged from November. The number of employed people edged up by 0.1 percent month-over-month to 40.53 million. Data released by the Labor Ministry showed that the number of persons without a job decreased by around 28,000 o 2.93 million in January, hitting the lowest level in eleven months. January's decline was significantly bigger than the 5,000 fall forecast by economists.
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| | Asian Markets | | | | USDCAD | USDEUR | USDGBP | USDJPY |  |  |  |  | | Please click on the images to view our interactive charts | | | The Asian markets retreated, unimpressed by the Fed decision and worried over a slowdown in China. The Taiwanese and South Korean markets were closed for a public holiday.
Japan's Nikkei 225 average plunged amid the strengthening of the yen, as traders sought the currency due to its safe haven appeal amid the risk aversion in play in the markets. The index ended down 376.85 points or 2.45 percent at 15,007. A majority of stocks declined in the session, with financial and real estate stocks among the worst hit.
Australia's All Ordinaries also languished below the unchanged line throughout the session before closing down 41.20 points or 0.79 percent at 5,199. The market witnessed broad based weakness, led by financial, consumer staple and energy stocks, although defensive telecom stocks bucked the trend with modest gains.
Hong Kong's Hang Seng Index ended at 22,035, down 106.19 points or 0.48 percent, and China's Shanghai Composite Index closed 16.83 points or 0.82 percent lower at 2,033.
On the economic front, revised estimates released by HSBC and Markit Economics showed that the Chinese manufacturing index based on their survey came in at 49.5 in January, down from 50.5 in December and the flash estimate of 49.6.
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| | Currency and Commodities Markets | | Crude Oil futures are rising $0.41 to $97.77 a barrel after dipping $0.05 to $97.36 a barrel on Wednesday.
The previous session's modest pullback came amid the Fed decision and the release of the petroleum status report, which showed that Crude oil stockpiles rose by 6.4 million barrels to 357.60 million barrels in the week ended January 24th. Inventories remained in the upper half of the average range.
Meanwhile, Gasoline stockpiles fell by 0.8 million barrels yet were well above the upper limit of the average range. Distillate fuel inventories slipped 4.6 million barrels and were well below the lower limit of the average range. Refinery capacity utilization averaged 89.2 percent over the four weeks ended January 24th compared to 90.3 percent over the four weeks ended January 17th.
The most actively traded Gold futures for April delivery are currently down $21.80 to $1,240.40 an ounce. The February futures settled Wednesday's session up $11.40 at $1,262.20 an ounce amid safe haven demand.
Among currencies, the U.S. dollar is trading at 102.65 yen compared to 102.29 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.3581 compared to yesterday's $1.3663.
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