Stock Futures Trim Gains Amid Mixed Data
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U.S. stock-index futures fell from the highs of the session as traders weighed disappointing data on the jobs front with a better-than-expected read on foreign trade.
Today's Markets
As of 8:42 a.m. ET, Dow Jones Industrial Average futures gained 21 points to 12765, S&P 500 futures climbed 2.3 points to 1366 and Nasdaq 100 futures jumped 7 points to 2711.
It's been an unusually volatile week on Wall Street. The markets sold off on Monday and Tuesday amid concerns about the U.S. economy and the debt situation in Europe. However, they rebounded to some extent on Wednesday after corporate bellwether Alcoa (NYSE:AA) revealed earnings that topped analysts' expectations.
Traders had a deluge of data to parse through on the day.
First-time claims for unemployment benefits jumped to the highest level since late January last week. Jobless claims hit 380,000 from an upwardly revised 367,000 the week prior. Claims were expected to fall to 355,000 from an initially reported 357,000.
The labor market has come under close scrutiny after the jobs report for March showed a much weaker-than-expected increase in payrolls.
On a more upbeat note, the U.S. trade gap narrowed far more than economists had expected in February. The deficit fell to $46.03 billion from $52.52 billion the month prior. Exports hit a record high, while imports edged slightly lower. While the report is a lagging indicator, it will factor directly into first-quarter economic growth readings. The smaller the deficit, the less it trims from GDP.
Inflation at the producer level held steady in March from the month prior, compared to expectations of a 0.3% increase. Excluding the food and energy components, prices were up 0.3%, a bigger gain than the 0.2% economists forecast.
Market participants said they were also focusing on commentary from Federal Reserve Vice Chair Janet Yellen made after the end of trading on Wednesday. While Fed officials speak fairly frequently, Fed watchers say Yellen's senior position on the central bank's monetary-policy setting board means she has considerable influence on decisions made.
Similar to statements from Chairman Bernanke, Yellen suggested: "further easing actions could be warranted if the recovery proceeds at a slower-than-expected pace, while a significant acceleration in the pace of recovery could call for an earlier beginning to the process of policy firming."
Analysts at Nomura wrote in a note to clients following the speech that while Yellen didn't suggest another round of easing was imminent, "she makes a strong case for maintaining a very accommodative policy for the foreseeable future."
On the corporate front, Google (NASDAQ:GOOG) is set to report its earnings after the closing bell. Analysts are expecting the search giant to post first-quarter earnings of $9.65 a share on sales of $8.1 billion. Sony (NYSE:SNE) chief executive Kazuo Hirai revealed his plan to revive the ailing Japanese electronics company, which will involve slashing 10,000 jobs and leaning out struggling internal divisions.
Energy futures were steady. Crude oil traded in New York rose 56 cents, or 0.56%, to $103.26 a barrel. Wholesale New York Harbor gasoline was unchanged at $3.30 a gallon.
In metals, gold slumped $6.50, or 0.39%, to $1,645 a troy ounce. U.S. Treasury yields got a reprieve for a second day in a row after plunging for five-straight sessions. The 10-year yield rose 0.008-percentage point to 2.051%.
Looking at Europe, Italy had a weak auction of three-year notes in which its borrowing costs spiked more than one percentage point. The FTSE MIB, which tracks Italian shares, slumped 0.63%, putting mild pressure on other European bourses.
Foreign Markets
European blue chips slid 0.42%, the English FTSE 100 dropped 0.13% to 5628 and the German DAX rose 0.46% to 6705.
In Asia, the Japanese Nikkei 225 jumped 0.7% to 9525 and the Chinese Hang Seng rallied 0.93% to 20327.