Markets May Receive Support From Bargain Hunting

(RTTNews) - The major U.S. index futures are pointing to a higher opening on Thursday, with sentiment showing an improvement, as the oversold levels bring in bargain hunters. Crude oil is flat lining and is on a recovery mode. Some of domestic earnings have been encouraging. Among the domestic economic data, separate reports showed that jobless claims unexpectedly increased and manufacturing activity in the Philadelphia region contracted at a slower than expected pace in January. The European Central Bank's dovish stance is helping stocks across the Atlantic.   U.S. stocks declined on Wednesday amid concerns about growth and a sell-off in risky bets, although the major averages closed off their lows of the day.    The major averages opened lower and declined steadily until the mid-session, falling more than 3 percent. Subsequently, the averages recouped some of their losses over the course of the session yet closed notably lower.    The Dow Industrials fell 249.28 points or 1.56 percent before ending at 15,767, the lowest closing level since February 6th, 2014, and the S&P 500 Index closed 22 points or 1.17 percent lower at 1,859, the lowest level since April 15th, 2014, while the Nasdaq Composite slipped a more modest 5.26 points or 0.12 percent to a 15-month low of 4,472.    Twenty-five of the thirty Dow components closed lower for the session, with Boeing (BA), Cisco Systems (CSCO), Chevron (CVX), IBM (IBM) and Exxon Mobil (XOM) among the worst hit. On the other hand, UnitedHealth (UNH) and Nike (NIKE) rose notably.    Energy, utility, retail, housing, financial and computer hardware stocks came under significant selling pressure. Meanwhile, airline, gold, and biotech stocks advanced.    On the economic front, the Labor Department reported that consumer prices eased 0.1 percent month-over-month in December. The core rate was 0.1 percent. Economists had expected the headline number to have remained unchanged and the core reading to have risen 0.2 percent. Annually, consumer prices were up 0.7 percent and core consumer prices rose 2.1 percent. Energy prices fell 2.4 percent and food prices were down 0.2 percent.     A Commerce Department report showed that housing starts fell 2.5 percent month-over-month to a seasonally adjusted annual rate of 1.149 million units in December from November's 1.179 million units. Economists expected a 1.200 million unit-rate. Building permits, considered an indicator of future housing starts, slipped to 1.232 million units from 1.282 million units in November, while the consensus estimate was for 1.217 million units. On a year-over-year basis, housing starts and building permits were up a healthy 6.4 percent and 14.4 percent, respectively.    Currency, Commodity Markets    In the first day of trading as the front month contract, crude oil futures for March delivery are slipping $0.02 to $28.33 a barrel. The March futures ended down $1.22 at $28.35 a barrel on Wednesday and the February contract settled at $26.55 a barrel, down $1.91, almost a 13-year low.     An ounce of gold is currently trading at $1,097, down $9.20 from the previous session's close of $1,106.20. On Wednesday, gold rallied $17.10.    On the currency front, the U.S. dollar is trading at 116.69 yen compared to the 116.94 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.0902 compared to yesterday's $1.0890.    Asia    The Asian markets ended lower, as the sell-off continued amid worsening risk aversion. However, the Australian market bucked the downtrend with a moderate gain.    The Japanese market retreated in a late hour sell-off despite the yen weakening to above the 117 level. The Nikkei 225 Index opened higher and held mostly above the unchanged line till late trading. Thereafter, the average declined sharply before ending down 398.93 points or 2.43 percent at 16,017, its lowest level since October 30th, 2014.    A majority of stocks retreated in the session, with weakness found across the board. Tokyo Dome, Mitsui Fudosan, Casio Computer, Yaskawa Electric and Unitika were among the worst performers of the session. On the other hand, glassmakers Asahi Glass and Nippon Electric Glass, Sharp and Screen Holdings gained ground. Sharp was reacting to reports that Foxconn has made an offer to buy the company for $5.3 billion.    Hong Kong's Hang Seng Index ended down 344.15 points or 1.82 percent at 18,542, its lowest closing level since July 8th, 2012. China's Shanghai Composite tumbled 96.21 points or 3.23 percent before ending at 2,881, its lowest level since December 9th, 2014.    Meanwhile, Australia's All Ordinaries Index hovered above the unchanged line throughout the session, although closing well off the highs of the session at 4,918, up 20.70 points or 0.42 percent. Most sectors advanced, led by telecom and consumer staple stocks. However, financial and real estate stocks came under selling pressure.    On the economic front, the results of a survey by the Melbourne Institute showed that inflation expectations for Australia declined in January. Inflation expectations for the month are at 3.6 percent, down from 4 percent in December.    The Japanese Ministry of Economy, Trade and Industry reported that all industry activity fell 1 percent month-over-month in November compared to a 0.9 percent increase in October. Economists expected a less severe 0.8 percent drop for the month. Construction activity slid steeply and industrial and tertiary activity also fell.    Europe    European stocks opened higher, as bargain hunting lifted the average at the open, aided by some positive domestic corporate news. After an upward spike in early trading, the averages began trimming their gains and moved in a volatile manner.   The averages have moved higher following the ECB decision.

The European Central Bank left its interest rates unchanged as policymakers wait to measure the impact of the December stimulus measures as a further slowdown in the emerging markets and the free fall of oil prices have complicated the picture. The 25-member Governing Council, which met in Frankfurt, left the main refinancing rate unchanged at a record low 0.05 percent.    In corporate news, brewer SABMiller reported higher underlying sales for its third quarter, as it managed to circumvent weakness in emerging markets amid strength in Latin America, Africa and Europe.     The Netherland's Ahold reported better than expected sales growth on strong domestic and U.S. performance. France's Remy Cointreau also reported above-consensus sales growth amid a resurgence in China.    On the economic front, the Royal Institution of Chartered Surveyors released the results of its house price balance survey, which showed that the house price balance rose to 50 percent in December from 49 percent in November. The increase was in line with expectations.    U.S. Economic Reports    Manufacturing conditions in the Philadelphia region contracted modestly in January, according to a report released by the Federal Reserve Bank of Philadelphia.   The Philly Fed said its diffusion index for current activity increased to a negative 3.5 in January from a negative 10.2 in December, although a negative reading indicates a contraction in regional manufacturing activity. Economists had expected the index to rise to a negative 4.0.    First-time claims for U.S. unemployment benefits unexpectedly increased in the week ended January 16th, according to a report released by the Labor Department .   The report said initial jobless claims climbed to 293,000, an increase of 10,000 from the previous week's revised level of 283,000. The increase came as a surprise to economists, who had expected jobless claims to drop to 275,000 from the 284,000 originally reported for the previous week.   The Energy Information Administration is set to release its weekly petroleum status report for the week ended January 15th at 11 am ET.    Crude oil stockpiles rose by 0.2 million barrels to 482.60 million barrels in the week ended January 8th. Stockpiles are still near levels not seen for this time of year in at least the last 80 years.    Distillate inventories increased by 6.1 million barrels and were above the upper limit of the average range for this time of the year. Gasoline inventories also jumped by 8.4 million barrels and were above the upper limit of the average range.    Refinery capacity utilization averaged 91.9 percent over the four weeks ended January 8th compared to 92.1 percent over the four weeks ended January 1st.    The Treasury Department will make announcements concerning next week's auctions of 2-year, 5-year and 7-year notes at 11 am ET.    Stocks in Focus 

Verizon's (VZ) fourth quarter results topped estimates. Among airlines, Southwest Airlines' fourth quarter adjusted earnings per share were in line but revenues missed estimates. United Airlines (UAL) reported fourth quarter net income and revenues that trailed estimates.

Bank of New York Mellon (BK) reported better than expected fourth quarter earnings per share.   Xilinx (XLNX) reported in line net income per share and better than expected sales for its third quarter. The company expects fourth quarter sales to be flat sequentially.     F5 Networks (FFIV) reported better than expected first quarter non-GAAP net income per share and revenues. However, its second quarter guidance is weak.    Sallie Mae's (SLM) fourth quarter earnings per share exceeded estimates.    Logitech (LOGI) reported better than expected third quarter non-GAAP earnings per share, while its revenues were shy of estimates. The company raised its 2016 profitability and retail sales growth outlook.    Cypress Semiconductor (CY) confirmed its fourth quarter financial guidance.    Citrix (CTXS) announced the appointment of Microsoft executive Kirill Tatarinov as its president and CEO, effective January 25th, 2016.    American Express (AXP), E*TRADE (ETFC), Intuitive Surgical (ISRG), Maxim Integrated (MXIM), Schlumberger (SLB) and Starbucks (SBUX) are among the notable companies due to release their quarterly results after the close of trading.    Travelers Companies (TRV) reported above-consensus earnings per share for its fourth quarter, while its revenues were slightly shy of estimates.

J.B. Hunt (JBHT) reported better than expected fourth quarter earnings per share and in line revenues. Union Pacific (UNP) reported below-consensus fourth quarter results.