News Column

Wall Street Seeking To Rebound Ahead Of Consumer, Manufacturing Data

August 29, 2014

WASHINGTON (Alliance News) - Trading in the US index futures suggests that Wall Street stocks may open slightly higher on Friday after yesterday's lackluster showing. Asian stocks closed mixed in an uneventful session, while the European markets are trading in a lackadaisical fashion. The domestic markets may now focus on a couple of economic data on consumer spending and regional manufacturing activity, although trading activity could remain light ahead of the extended weekend due to Monday's public holiday on account of Labor Day.

As of 6:15 am ET, the Dow futures are adding 26 points, the S&P 500 futures are advancing 3.50 points and the Nasdaq Composite futures are gaining 8 points.

US stocks retreated on Thursday amid an increase in risk appetite.

On the economic front, the Commerce Department is scheduled to release its personal income and spending report for July at 8:30 am ET. Economists expect personal income to rise by 0.3% month-over-month and personal spending by 0.2%.

MNI Indicators is due to release the results of its manufacturing purchasing managers' survey for the Chicago region. The business barometer for the region is expected to come in at 56.4 in August compared to 52.6 in June.

In corporate news, Microchip Technology (MCHP) announced that it has had preliminary mutual discussions with CSR PLC for a probable deal to buy CSR. The company cautioned that the discussions are at a very preliminary stage and there can be no certainty an offer will be made.

Pacific Sunwear (PSUN) reported a loss on an adjusted basis for its second quarter, which was in line with estimates. The company's revenues exceeded estimates.

Fred's (FRED) reversed to a loss in its second quarter but its revenues were ahead of estimates. The company's 2014 earning guidance was lackluster. In a restructuring exercise, the company announced plans to close 60 stores that have no pharmacies and don't meet operational performance targets. With improvement expected from the restructuring exercise, the company expects fiscal year 2015 profits that are above the consensus estimate.

The major Asian markets closed mixed, with traders digesting the negative close on Wall Street overnight and a slew of economic data from Japan.

The Japanese market retreated, with the yen's strength amid the risk aversion exerting downward pressure on stocks. The Nikkei 225 average languished below the unchanged line throughout the session before closing down 35.27 points or 0.23% at 15,425. Realty, resource, pharma, financial, real estate and export stocks moved mostly to the downside, while utility stocks gained ground.

Australia's All Ordinaries moved about in a volatile manner, moving back and forth across the unchanged line before closing up 3.30 points or 0.06% at 5,625. Energy, financial, industrial and IT stocks advanced, while material, consumer staple and healthcare stocks came under selling pressure,

Hong Kong'sHang Seng Index ended up merely 1.06 points at 24,742 and China's Shnaghai Composite closed 21.38 points or 0.97% higher at 2,217.

Among the slew of data released from Japan, the Ministry of Internal Affairs and Communication reported that annual core consumer price inflation in Japan was at 3.3% in July, in line with estimates. A separate report showed that the unemployment rate in Japan came in at 3.8% in July, bigger than the 3.7% rate expected by economists.

A Ministry of Economy Trade and Industry showed that retail sales grew 0.5% year-over-year in July, belying expectations for a 0.2% drop. Another report from the ministry showed that industrial production in Japan was up 0.2% month-over-month in July, trailing expectations for a 1% increase. Annually, industrial output fell a worse than expected 0.9%. Housing starts fell more than expected in July, according to a separate report.

After opening higher amid some bargain hunting, European stocks have given back some of their gains amid a lack of momentum to push stocks higher. The major averages are currently holding up modestly higher.

On the economic front, a report released by the GfK showed that its index measuring consumer confidence in the UK rebounded to 1 in August, exceeding expectations for a score of -1. Final estimates released by Eurostat showed that the annual inflation in the eurozone eased to 0.3% in August from 0.4% in July, in line with estimates. Another report showed that the unemployment rate in the euro area remained unchanged at a 21-month low of 11.5% in July.

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Source: Alliance News

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