U.S. stock futures are pointing to a higher open Thursday, as investors await key data on private sector employment and economicgrowth.
NEW YORK (TheStreet) -- U.S. stock futures were pointing to a higher open Thursday, as investors awaited key data on private sector employment and economic
growth.
European shares were also trading higher, although worries about
Spain's deteriorating fiscal condition and Greece's future in the euro continues to drive demand for safe haven assets with German bond futures near record highs.
Futures for the Dow Jones Industrial Average were up by 45
points at 12,426. S&P 500 futures were up by nearly 5 points at
1,313. Futures for the Nasdaq were rising by 6.5 points to
2,537.
Stocks fell sharply Wednesday as deepening fears about Spain's shaky
financial condition spoiled risk appetite and drove investors into
bonds, sending the yield on 10-year Treasuries to record lows.
With only one trading day in May left, the S&P 500 is on pace for its
worst monthly slump since September. The index has declined 6% in May
amid intensifying worries about the eurozone debt crisis. The Dow has
had only five positive trading sessions over the month.
On Thursday, however, concerns about Europe might take a temporary
backseat in the U.S. as investors digest a raft of data that could
shed light on the health of the domestic economy.
The focus will be on the ADP Employment Report that will
be released at 8:15 EDT. Economists expect the private sector to have
added 148,000 jobs in May, according to Thomson Reuters. In
April, companies created 119,000 jobs
Bad news on jobs could further dampen investor sentiment and revive
expectations that the Federal Reserve will do more to boost the
economy.
Ian Shepherdson of High Frequency Economics however expects the ADP to surprise.
"...The markets have not yet had to deal with the combination of grim
news from Europe and good news from the U.S," Shepherdson wrote ahead
of the report. " The past two months' employment numbers have made it
safer to be long Treasuries, but we are far from convinced that
position is sustainable. The fox could be let loose in the chicken
coop as soon as today, if the May ADP private employment report --
delayed by the Memorial Day holiday weekend -- is as strong as we
expect."
At 8:30 a.m., the Bureau of Economic Analysis at the Department of
Commerce will release its second estimate of first-quarter GDP. The
report is expected to say that the economy expanded at a rate of 1.9%
during the first quarter, down from the advance estimate of 2.2%.
Also at 8:30 a.m., the Labor Department will release its weekly jobless
claims report. Initial jobless claims for the week ending May 26 is
likely to come in at 370,000, unchanged from the previous week,
according to economists polled by Thomson Reuters.
At 9:45 a.m., the Institute for Supply Management - Chicago will
release its report on business conditions in the region.The consensus is for Chicago PMI to come in at 57 for May, up slightly from 56.2 in April.
Later at 10:30 a.m. ET, the Department of Energy will release its
weekly status reports on natural gas, followed by a report on oil
inventories at 11 a.m.
July oil futures were higher by 26 cents at $88.08 a barrel and August
gold futures were adding $2.4 to $1,567 an ounce.
Meanwhile, the benchmark 10-year Treasury was lower by 4/32, raising
the yield to 1.637% and the greenback was off by 0.25%, according to
the dollar index.
The euro was recovering by 0.4% at $1.2411 after slipping close to its
two-year low on Wednesday.
European markets were trading higher after an opinion poll showed
Ireland will vote in favor of the fiscal stability pact designed to
contain the European debt crisis.
Also boosting sentiment, inflation in the 17-nation area fell to 2.4%
from 2.6%, the slowest pace since February 2011, while the German
unemployment rate fell to 6.7% in April.
The FTSE in U.K. was gaining 0.8%, while the DAX in Europe was adding 0.4%.
Asian markets sold off, tracking the risk-off trade in European and
U.S. markets on Wednesday. Hong Kong's Hang Seng dropped 0.3%, while
Japan's Nikkei declined 1%.
In corporate news, the nation's retailers including Gap(NYSE:GPS) and
Target(NYSE:TGT) will report their same-store sales numbers for May.
Costco(NYSE:COST) said same-store sales rose 4%, short of the 4.3%
analysts were expecting.
TiVo(NYSE:TIVO) reported weak first-quarter results and second-quarter
guidance. The digital video recording company posted a loss of 17
cents a share on revenue of $67.8 million. Analysts were expecting a
loss of 15 cents a share on $54.89 million in service and technology
revenue.
For its fiscal second quarter, TiVo said it expects service and
technology revenue to be between $53 million and $55 million and
projects a net loss of $28 million to $30 million. Analysts expect
revenue of $56.5 million and a loss of $27 million.
Ciena(NYSE:CIEN) is set to report on Thursday. The network equipment maker
is expected to post a second-quarter loss of 3 cents a share on
revenue of $447 million.