Stimulus From Across Atlantic Could Spur Buying

(RTTNews) - The major U.S. index futures are pointing to a mixed opening on Thursday,  with sentiment suggesting a modest upside after the Bank of England stimulus announcement. The stimulus, though widely expected, is triggering a strong upward move by London stocks, although elsewhere the reaction has been muted. The pound retreated on the BoE announcement and the downgraded forecasts of the central bank. Domestically, jobless claims report released a short while ago showed an unexpected modest increase in claims. Stimulus from across the Atlantic could spur some buying, although risk sentiment is still lukewarm.   After a few sessions of lackluster performances, U.S. stocks closed firmly in the green on Wednesday, as oil rebounded strongly on the back of some strong domestic data.    The major averages opened higher and rose steadily in the morning. After a rough sideways movement until late trading, the averages saw further upside going into the close.    The Dow Industrials added 41.23 points or 0.23 percent before ending at 18,355, the S&P 500 Index closed 6.76 points or 0.31 percent higher at 2,164 and the Nasdaq Composite closed at 5,160, up 22 points or 0.43 percent.    Nineteen of the thirty Dow components closed higher for the session, while the remaining eleven stocks retreated.    JP Morgan Chase (JPM), Goldman Sachs (GS), Apple (AAPL), Disney (DIS), Chevron (CVX) and Caterpillar (CAT) were among the biggest gainers among the Dow components. On the other hand, Pfizer (PFE), Merck (MRK), Procter & Gamble (PG) and Intel (INTC) fell notably.    Among the sectors, financial, energy and biotechnology stocks saw considerable strength, but gold stocks gave back some ground.    On the economic front, ADP reported that the private sector added 179,000 jobs in July following an addition of 176,000 in June. Economists expected an increase of 165,000 jobs for the month.    The results of the Institute for Supply Management's service sector survey showed that service sector activity expanded at a slower than expected pace in July. The non-manufacturing index fell to 55.5 from 56.5 in June, while economists forecast a more modest drop to 56. Fifteen non-manufacturing industries reported growth.     The business activity index edged down 0.2 points to 59.3, the employment index slid 1.3 points to 51.4 and the prices index moved down 3.6 points to 51.9. However, the new orders and the order backlogs index rose 0.4 points and 3.5 points, respectively to 60.3 and 51.    Final estimates of Markit's U.S. non-manufacturing PMI released ahead of the ISM's report showed an unchanged reading of 51.4 for July.    Currency, Commodity Markets    Crude oil is currently slipping $0.06 to $40.77 a barrel. The September futures ended the previous session up $1.32 at $40.83 a barrel.??  ?  The gain seen in the previous session came amid the release of the weekly petroleum status report for the week ended July 29th, which showed that crude oil stockpiles increased by 1.4 million barrels to 522.50 million barrels. Stockpiles were at historically high levels for this time of year.   ?  Distillate inventories rose by 1.2 million barrels and were above the upper limit of the average range for this time of the year. Meanwhile, gasoline inventories fell by 3.3 million barrels but were well above the upper limit of the average range.?  ?  Refinery capacity utilization averaged 92.8 percent over the four weeks ended July 29th compared to 92.6 percent for the four weeks ended July 22nd.  ?  Gold futures are currently trading at $1,369.60 an ounce, up $4.90 from the previous session's close of $1,364.70 an ounce. On Wednesday, gold fell $7.90.?    On the currency front, the U.S. dollar is trading at 101.11 yen compared to the 101.24 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.1140 compared to yesterday's $1.1149.    Asia    The Asian markets advanced, helped by the positive close on Wall Street overnight and expectations that the Bank of England would announce a reduction in interest rates later in the day.    The Japanese market benefited from the re-emergence of risk appetite, which pushed down the yen and in turn propped up stocks. The Nikkei 225 Index opened higher but lost momentum mid-way through the session. After dipping below the unchanged line in the mid-session, the index recovered in the afternoon, closing up 171.78 points or 1.07 percent at 16,255.    A majority of stocks advanced, led by export stocks. However, defensive telecom, food, construction and food stocks came under selling pressure.    Australia's All Ordinaries Index hovered in positive territory throughout the session before ending up 12 points or 0.22 percent at 5,563. Energy and healthcare stocks led the day's gains, while healthcare stocks retreated.    Hong Kong's Hang Seng Index added 93.11 points or 0.43 percent before ending at 21,832, and China's Shanghai Composite Index closed at 2,982, up 3.97 points or 0.13 percent.    On the economic front, a report released by the Australian Bureau of Statistics showed that retail sales in Australia rose merely 0.1 percent month-over-month in June, while economists expected a 0.3 percent increase.     Europe    European stocks opened higher and saw uneasy gains ahead of the all-important Bank of England rate decision. Following the announcement, the U.K. Market turned notably higher and the French and German markets are also seeing modest to moderate gains.

 The Bank of England reduced its key interest rate for the first time in more than seven years and expanded its quantitative easing as the "Brexit" vote deepened the case for a technical recession. 

The Monetary Policy Committee, governed by Mark Carney, unanimously voted to cut its bank rate by 25 basis points to a fresh record low of 0.25 percent. This was the first reduction in rates since March 2009.

Policymakers voted 6-3 to expand the asset purchase program by 60 billion pounds to 435 billion pounds. Kristin Forbes, Ian McCafferty and Martin Weale voted against the proposition, preferring no change.

The bank introduced a Term Funding Scheme that will be financed by the issuance of central bank reserves. All members voted in favor of this proposition. The bank will also purchase up to 10 billion pounds of UK corporate bonds. The scheme was approved with an 8-1 majority   In major corporate news, Siemens (SI) reported better than expected quarterly profits and raised its guidance for the full year. Nokia (NOK) reported a loss for the second quarter and signaled more cost cuts. Germany's Merck KgaA reported strong second quarter results and raised its outlook for the year.    U.S. Economic Reports     With the monthly jobs report looming, the Labor Department released a report showing a modest uptick in first-time claims for U.S. unemployment benefits in the week ended July 30th.   The report said initial jobless claims rose to 269,000, an increase of 3,000 from the previous week's unrevised level of 266,000. Economists had expected claims to edge down to 265,000.   At 10 am ET, the Commerce Department is due to release its factory orders data for June. The consensus estimate calls for a 1.8 percent month-over-month drop in orders. 

In May, factory orders fell 1 percent, in line with expectations, with the weakness centered on capital goods.     Meanwhile, June durable goods orders, which account for the bulk of factory orders, fell 4 percent?in June compared to?the 1.3 percent drop expected by economists. Annually, durable goods orders were down 6.4 percent.     Excluding transportation, orders were down 0.5 percent month-over-month, belying expectations for a 0.3 percent increase. The annual rate of change in?ex-transportation orders?was?-3.6 percent.     Non-defense capital goods orders, excluding aircraft and parts, a measure of capital spending,?were?up a mere 0.2 percent.?    Stocks in Focus    21st?Century Fox (FOXA) reported better than expected adjusted earnings per share for the fourth quarter but its revenues missed estimates. The company also announced a 6 cent-per share increase in its annual dividend.    Among insurers, Allstate (ALL) reported better than expected operating earnings and revenues for its second quarter.     Lincoln National (LNC) reported below consensus operating earnings per share and a dip in its revenues. MetLife (MET) also reported below-consensus operating earnings per share a decline in revenues. Prudential's (PRU) operating earnings per share also trailed expectations.    First Solar (FSLR) reported better than expected second quarter results and issued in line fully year guidance.    Jack In The Box' (JACK) second quarter results surpassed expectations.    Marathon Oil (MRO) reported a narrower than expected adjusted loss for its second quarter, but its revenues missed expectations.    Tesla Motors' (TSLA) second quarter results came in below estimates.    Transocean (RIG) reported second quarter earnings and revenues that were ahead of expectations.    Western Union (WU) reported above-consensus second quarter earnings per share and its revenues were in line.    Activision Blizzard (ATVI), Allscripts Healthcare (MDRX), Con Edison (ED), Fluor (FLR), Kraft Heinz (KFT), Liberty Global (LBTYA), LinkedIn (LNKD), Motorola Solutions (MSI), News Corp. (NWS), Post (POST), Symantec (SYMC), Take-two (TTWO), Weight Watchers (WTW) and Zinga (ZNGA) are among the companies due to release their quarterly results after the close of trading.?