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| | US Market |  | | NYSE | AMEX | Dow Jones | Nasdaq |  |  |  |  | | Please click on the images to view our interactive charts | | The major U.S. index futures are pointing to a higher opening on Thursday, with sentiment still fluid amid conflicting signals. Among the twin data released earlier in the day, durable goods orders unexpectedly fell, with the weakness broad based. However, jobless claims fell more than expected. The dollar has weakened in reaction to the data. Crude oil prices are higher but most other commodities are mixed.
Earnings news has been mixed, with some good tidings coming in from tech space, while the industrial space threw in disappointments. The sell-off in China continued and the European markets are also notably lower, as inflation data from Germany tempered stimulus expectations. Given the mixed catalysts, volatility could not be ruled out.
U.S. stocks retreated on Wednesday amid the release of some disappointing corporate earning, volatility in crude oil prices and the message relayed by the FOMC statement. The markets were spooked, as the Fed did not explicitly rule out a rate increase at the March meeting.
The major averages opened lower and languished below the unchanged line till early afternoon trading. Although the Dow Industrials and the S&P 500 Index bounced firmly into positive territory and the Nasdaq Composite briefly climbed above the unchanged line, the averages retreated in reaction to the Fed's policy statement. After a steady retreat and some sideways movement in the final hour, the averages all ended firmly in the red.
The Dow Industrials fell 222.77 points or 1.38 percent before ending at 15,945 and the S&P 500 Index closed 20.68 points or 1.09 percent lower at 1,883, while the Nasdaq Composite plunged a steeper 99.51 points or 2.18 percent to 4,468.
Twenty-three of the thirty Dow components closed lower for the session, with Apple (AAPL) tumbling 6.57 percent after its lukewarm first quarter results and weak second quarter guidance. Boeing (BA) also plunged 8.93 percent on its forecast. On the other hand, Johnson & Johnson (JNJ) and Verizon (VZ) rose strongly.
Among the sectors, biotechnology, airline, basic material, semiconductor, retail and housing stocks came under selling pressure. On the other hand, gold and oil service stocks moved higher.
On the economic front, the FOMC statement released following the conclusion of a 2-day meeting acknowledged the slowdown in growth late last year. Nevertheless, as a justification of December's upward rate move, the Fed stated that labor market conditions improved further. The improvement in household spending and business fixed investment was qualified as moderate as opposed to solid. The statement also added a slowdown in inventory investment to its commentary.
The inflation commentary was also tweaked to suggest that survey-based measures of longer-term inflation expectations are little changed. After terming market-based measures of inflation compensation as low last December, the Fed now said they have declined further.
The Fed also said it is closely monitoring global economic and financial developments and is assessing their implications for the labor market and inflation and for the balance of risks to the outlook. For now, the central bank chose to maintain the Fed funds target rate unchanged at 0.25-0.50 percent after raising it from 0-0.25 percent last December.
The Commerce Department reported that the new home sales came in at a seasonally adjusted annual rate of 544,000 units in December. Economists expected a 500,000 rate for the month compared to 491,000 for November.
Inventories of new homes measured in absolute terms rose by 6,000 month-over-month to 237,000, but stocks measured in terms of months of supply fell to 5.2 months from 5.6 months in November. The median price of a new home fell 2.7 percent month-over-month to $288,900, which would mean a year-over-year drop of 4.3 percent.
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| | US Economic Reports | | | | CADUSD | Oil | Gold | Allbanc |  |  |  |  | | Please click on the images to view our interactive charts | |
The Labor Department reported that jobless claims fell 16,000 to 278,000 in the week ended January 23rd from an upwardly revised reading of 294,000 in the previous week. Economists expected claims to have declined to 285,000 from 293,000 initially reported for the previous week.
The four-week average fell to 283,000 from 285,250. However, continuing claims calculated with a week's lag rose to 2.268 million in the week ended January 16th from 2.219 million in the week ended January 9th.
A Commerce Department report showed that durable goods orders fell 5.1 percent month-over-month in December, with orders decreasing for four of the last five months. The consensus estimate had called for a 0.2 percent month-over-month increase 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 the shipments of this category of goods were also down.
The National Association of Realtors is set to release its pending home sales index for December at 10 am ET. Economists expect a 0.8 percent month-over-month increase in pending home sales.
Pending home sales unexpectedly fell 0.9 percent in November compared to expectations for a 0.5 percent increase. In October, pending home sales had risen 0.2 percent. Pending home sales climbed in the Midwest and South, while pending sales declined in the Northeast and West. However, annually, the metric was up 2.7 percent.
The Kansas City Federal Reserve is due to release its regional manufacturing index for January at 11 am ET. Economists expect a reading of -8 for the month.
The Treasury Department will announce the results of its auction of 7-year notes at 1 pm ET.
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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 (FB) reported above-consensus adjusted earnings per share and revenues for its fourth quarter.
Qualcomm (QCOM) provided weak second quarter revenue and non-GAAP earnings per share guidance but reported better than expected first quarter adjusted earnings per share.
eBay (EBAY) reported in line fourth quarter adjusted earnings per share from continuing operations and revenues. The company's full year guidance was weak. PayPal (PYPL), which was spun-off from eBay, reported better than expected fourth quarter results but issued lukewarm guidance for 2016.
Texas Instruments (TXN) reported better than expected fourth quarter earnings per share, while revenues missed estimates. The company's second quarter earnings per share guidance was in line, but its revenue guidance trailed expectations.
Juniper (JNPR) reported above-consensus non-GAAP net income per share for its fourth quarter. While the company's first quarter revenue guidance was in line, its non-GAAP earnings per share guidance was weak.
SanDisk (SNDK) reported fourth quarter non-GAAP earnings per share and revenues notably ahead of estimates.
Las Vegas Sands (LVS) announced a 10.8 percent increase in its common stock dividend despite reporting below-consensus adjusted earnings per share for its fourth quarter.
Discover Financial Services' (DFS) reported below-consensus earnings per share for its fourth quarter.
United Rentals (URI) reported fourth quarter adjusted earnings per share and revenues that trailed estimates. The company's full year revenue guidance was lukewarm.
McKesson (MCK) reported third quarter adjusted earnings that were ahead of estimates. The company's 2016 adjusted earnings per share guidance was in line.
Ameriprise Financial (AMP) reported better than expected fourth quarter operating earnings per share.
Celestica (CLS) reported below consensus adjusted earnings per share for its fourth quarter, while its revenue exceeded estimates.
Incyte (INCY) said it is stopping its Phase 2 sub-study of Ruxolitinib plus Regorafenib in patients with metastatic colorectal cancer and high C-reactive protein, as the combo did not show a sufficient level of efficacy to warrant continuation.
Abbott's (ABT) reported better than expected fourth quarter adjusted earnings per share from continuing operations and sales were about in line. The company's full year adjusted earnings per share guidance is in line with estimates.
Caterpillar's (CAT) fourth quarter results missed estimates and the full year revenue outlook is light, although adjusted earnings per share outlook is positive.
JetBlue (JBLU) reported better than expected fourth quarter results, while AutoNation's (AN) fourth quarter results missed estimates.
Cypress Semiconductor's (CY) fourth quarter non-GAAP earnings per share were in line, while its revenues exceeded estimates. However, the company's first quarter adjusted earnings per share guidance is weak.
Baker Hughes (BHI) reported a wider than expected loss for its fourth quarter and its revenues were slightly shy of estimates.
Ford (F) reported above-consensus results for its fourth quarter and confirmed its 2016 guidance.
Under Armour's (UA) fourth quarter results beat estimates and issued an upbeat revenue outlook for 2016. Lear (LEA) reported better than expected fourth quarter adjusted earnings per share but its revenues were slightly shy of estimates. The company reaffirmed its 2016 outlook. Raytheon (RTN) reported better than expected fourth quarter results but its earnings per share guidance for 2016 is weak.
Alibaba (BABA) reported higher third quarter earnings and revenues.
Amazon (AMZN), Amgen (AMGN), Applied Micro (AMCC), Electronic Arts (EA), Flex (FLEX), Hanesbrands (HBI), KLA-Tencor (KLAC), Manitowoc (MTW), Microsemi (MSCC), Microsoft (MSFT), Netsuite (N), Reinsurance Group of America (RGA), Skywoks (SWKS), Unisys (UIS), Visa (V) and Western Digital (WDC) are among the companies due to release their quarterly results after the close of trading. |
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| | European Markets |
European stocks saw volatility in early trading amid the release of mixed domestic corporate tidings and as traders made sense of the Fed's policy statement. The averages are currently notably lower.
In corporate, Swiss drug giant Roche reported full year adjusted earnings that missed estimates, while revenues were robust. Deutsche Bank (DB) reported a loss for its fourth quarter and the full year, hurt by weak investment banking business.
Diageo reported a decline in its first half profits, with the forex impact serving as a drag. Swedish white goods giant Electrolux reported a fourth quarter loss due to costs associated with its now-collapsed deal to buy General Electric's (GE) appliances business.
On the economic front, the first estimate of U.K. GDP released by the U.K. Office for National Statistics showed that the economy expanded 0.5 percent sequentially in the fourth quarter. The expansion was in line with estimates. The year-over-year growth of 1.9 percent was also in line with estimates. A separate report showed that the index of services rose in line with expectations in November.
A report released by the German Federal Statistical Office showed that German import prices declined 3.1 percent year-over-year in December, marking the smallest decline since last August. Economists expected a 3 percent drop. On a monthly basis, import prices fell 1.2 percent, in line with estimates. Export prices rose 0.2 percent annually but declined 0.4 percent month-over-month.
German consumer prices rose at the fastest pace in eight months during January, exceeding economists' expectations, preliminary data from Destatis showed. The consumer price index climbed 0.5 percent year-on-year following 0.3 percent increase in December. Economists had forecast 0.4 percent rise.
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| | Asian markets | | | | USDCAD | USDEUR | USDGBP | USDJPY |  |  |  |  | | Please click on the images to view our interactive charts | |
Most Asian markets advanced, despite the weakness on Wall Street, unimpressed by the Fed's language in its post-meeting policy statement. However, the Chinese market slumped and the Japanese market also came under pressure.
The Japanese market retreated amid subdued trading in the yen. The Nikkei 225 Index opened notably lower but cut its losses over the course of morning. After remaining above the flat line in the mid-session, the index retreated in the afternoon, ending down 122.47 points or 0.71 percent at 17,042.
Resource, electric utilities, marine transportation, real estate, financial, chemical and most export stocks moved to the downside. On the other hand, telecom, other utilities, retail and pharma stocks gained ground.
Alps Electric plunged over 17 percent in reaction to the company trimming its full year profit guidance. Taiyo Yuden slumped 8.86 percent. JFE Holdings and Nisshin Steel also fell notably.
China's Shanghai Composite Index ended at 2,656, down a whopping 79.90 points or 2.92 percent, while Hong Kong's Hang Seng Index closed 143.38 points or 0.75 percent higher at 19,196.
Australia's All Ordinaries Index, which was mostly weaker in the morning, recovered in the afternoon and ended up 27.30 points or 0.55 percent at 5,028. A majority of sectors advanced, led by material, telecom, industrial and energy stocks, although consumer discretionary stocks came under selling pressure.
On the economic front, a report released by Japan's Ministry of Economy, Trade and Industry showed that retail sales edged down 0.2 percent month-over-month in December, belying expectations for a 1 percent increase. Annually, retail sales unexpectedly fell by 1.1 percent.
The Australian Bureau of Statistics reported that export prices in Australia fell 5.4 percent sequentially in the fourth quarter compared to expectations for a more modest 3.9 percent drop. Import prices fell 0.3 percent, smaller than the 0.8 percent drop expected by economists.
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| | Currency and Commodities Markets |
Crude oil futures are slipping $0.62 to $32.92 a barrel after advancing $0.85 to $32.30 a barrel on Wednesday.
The previous session's gain came amid the release of the weekly petroleum status report, which showed that crude oil stockpiles rose by 8.4 million barrels to 494.90 million barrels in the week ended January 22nd. Stockpiles are still near levels not seen for this time of year in at least the last 80 years.
Gasoline inventories also jumped by 3.5 million barrels and were well above the upper limit of the average range. Meanwhile, distillate inventories fell by 4.1 million barrels but were near the upper limit of the average range for this time of the year.
Refinery capacity utilization averaged 90.4 percent over the four weeks ended January 22nd compared to 91.7 percent over the four weeks ended January 15th.
The most actively traded gold futures for April delivery are currently trading at $1,121.60, up $5.30 from the previous session's close of $1,116.30. On Wednesday, the February futures settled down $4.40 at $1,115.80 an ounce.
On the currency front, the U.S. dollar is trading at 118.70 yen compared to the 118.68 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.0927 compared to yesterday's $1.0893.
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