Stock Futures Climb as ECB Holds Rates Steady
Wall Street was setting up for gains on Thursday, with stock futures higher as investors looked at possible rate cuts from the European Central Bank, and waited for weekly jobless claims and trade data.
Twitter Inc. could see pressure after earnings disappointed investors late Wednesday, while Green Mountain Coffee Roasters Inc. could see a sizable bump after a deal with Coca-Cola Co.
Futures for the Dow Jones Industrial Average rose 75 points, or 0.5%, to 15443, while those for the S&P 500 index gained 9.8 points, or 0.5%, to 1753.80. Futures for the Nasdaq-100 index rose 20 points, or 0.6%, to 3465.50.
Those gains raised some eyebrows.
"It is surprising to see stocks trading so much higher ahead of a big rate decision from the ECB, but we must remember that there has been a significant selloff since the start of the year. I think this is partly a case of stocks paring some of these losses," said Craig Erlam, market analyst at Alpari U.K., in emailed comments.
"On top of that, the ECB is widely expected to either cut interest rates or, at the very least, release a very dovish statement which hints at some form of easing in the next couple of months. This could also be boosting stocks this morning," Mr. Erlam said.
European stocks were on solid ground ahead of the rate decisions, with analysts increasing betting on rate cuts.
Ahead of U.S. data, decisions on monetary policy will be handed down from the ECB at 7:45 a.m. EST, while investors will also closely watch a news conference with the central bank's president, Mario Draghi, starting at 8:30 a.m. EST.
Some analysts say the ECB could drop the main refinancing rate by 15 basis points to 0.1%, and even push deposit rates into negative territory, though others don't expect a change. The Bank of England, meanwhile, isn't expected to make any change on policy, but may give more cues on forward guidance. That decision is due at 7 a.m. EST.
U.S. data on tap includes the December trade gap at 8:30 a.m. EST, and economists polled by MarketWatch forecast the deficit to widen to $36 billion from $34.3 billion in November. Fourth-quarter productivity data is due at the same time.
In addition, weekly jobless claims will be released at 8:30 a.m. EST. Economists predict the number seeking unemployment benefits will fall to 337,000 in the last week of January, from a one-and-a-half-month high of 348,000 in the prior week. The data comes a day after a disappointing report on private-sector jobs growth from ADP and a day ahead of key nonfarm-payroll figures.
The ADP data triggered a choppy session for Wall Street on Wednesday, and the S&P 500 closed down 3.56 points, or 0.2%, at 1751.64. The index is 5.2% below a peak reached on Jan. 15, after a bout of recent selling.
On the corporate side, investors will be watching carefully to see how Twitter (TWTR) performs after the micro-messaging website's monthly user numbers came in lower than forecast, even as revenue rose. Its shares tumbled more than 11% in late trading Wednesday.
Shares of Green Mountain Coffee Roasters (GMCR) surged as much as 60% late Wednesday, after the Vermont coffee roaster announced a 10-year deal with Coca-Cola (KO) over an at-home cold-drink system.
Costco Wholesale Corp. (COST) reported total same-store sales rose 4% in the four weeks to Feb. 2. Comparable U.S. sales were strongest, with a gain of 5%.
In other markets, Asian stocks had a mixed day, while the dollar stayed mostly firmer. Gold and natural gas climbed ahead of supply data.