Market Commentary and Intraday News

Wall Street Musters Confidence Even As Economic Concerns Remain

224 days ago

(RTTNews) - Wall Street is slowly and steadily mustering optimism following the drubbing the markets received in the previous three sessions. The U.S. index futures point to a higher opening on Thursday. Even as confidence recovers, traders are likely to be wary over the developments on the eurozone debt crisis front. Earlier in the day, Standard & Poor's lowered its rating on Spain just above junk status, accentuating the risk facing the nation. Traders may also focus on a few domestic economic reports, including the market moving jobless claims reports, due later in the trading day.

As of 6:15 am ET, the Dow futures are advancing 36 points and the S&P 500 futures are moving up 4.60 point, while the Nasdaq 100 futures are gaining 11.25 points.

U.S. stocks succumbed to economic uncertainty-induced sell-off yet again on Wednesday. Earnings worries also increased after Alcoa's (AA) lukewarm results and Chevron's (CVX) insipid interim update.

On the economic front, the trade gap data for August is due out at 8:30 am ET. Economists estimate that the trade gap widened to $44 billion in the month from $42 billion in July

The Labor Department is due to release its customary jobless claims report for the week ended October 6th at 8:30 am ET. Economists expect claims to increase to 370,000 from 367,000 in the previous week.

Around the same time, the export & import price indexes for September are also due. The consensus estimates call for a 0.7 percent month-over-month increase in import prices and a 0.4 percent rise in export prices.

Federal Reserve Governor Jeremy Stein will answer questions at the Brookings Institution in Washington at 10 am ET. Philadelphia Federal Reserve Bank President Charles Plosser is due to speak to the Southern Chester County Chamber of Commerce Fall Luncheon on the economic outlook at 12:30 pm ET.

The Energy Information Administration is scheduled to release its weekly petroleum inventory report for the week ended October 5th at 11 AM ET.

In corporate news, VOXX International's (VOXX) second quarter results trailed estimates. The company also lowered its 2013 adjusted EBITDA guidance to $61 million due to European softness.

Mercury Computer Systems (MRCY) said it has received a $2.2 million purchase order relating to an airborne radar application for fighter aircraft.

Ruby Tuesday (RT) reported first quarter adjusted earnings of 5 cents per share compared to earnings of 5 cents per share last year. Revenues rose to $332.92 million from the year-ago quarter's $330.35 million, exceeding the $331.52 million consensus estimate. For 2013, the company expects adjusted earnings of 24-34 cents per share, surrounding the consensus estimate.

GenCorp. (GY) reported a third quarter loss from continuing operations of 15 cents per share compared to net income of 2 cents per share. Net sales climbed to $244.9 million from the year-ago quarter's $226.2 million.

PC makers are in the spotlight after Gartner released the results of its third quarter PC market survey. The company noted that worldwide shipments totaled 87.5 million in the third quarter, down 8.3 percent year-over-year. Lenovo toppled HP (HPQ) as the leader in the PC market, with its shipments rising 9.8 percent, giving it a market share of 15.7 percent. HP's share slid to 15.5 percent, as its shipments declined 16.4 percent. Dell (DELL) was a distant third, garnering 10.5 percent of the total market and registering a 13.7 percent decline in shipments.

The major Asian markets closed mostly lower, although some late closing Asian markets got a reprieve and closed mostly higher. Soft machinery orders data from Japan and the downgrade of Spain's sovereign rating by S&P compounded market worries over the fragile economic environment.

Japan's Nikkei 225 average closed down 49.45 points or 0.58 percent at 8,547, the lowest level since July 26th. Resource, export, real estate, construction, telecom and financial stocks came under selling pressure, while utility stocks gained ground.

Australia's All Ordinaries ended 6.70 points or 0.15 percent lower at 4,505. Energy and material stocks led the declines. Hong Kong's Hang Seng Index closed at 20,999, up 79.45 points or 0.38 percent.

On the economic front, Japan's Cabinet Office reported that core machinery orders in Japan declined 3.3 percent month-over-month in August compared to expectations for a 2.3 percent drop. Annually, core machinery orders fell 6.1 percent. A separate report released by the Bank of Japan showed that bank lending rose 1.2 percent year-over-year in September.

European stocks are trading higher following three straight sessions of declines. The gains have come despite Standard & Poor's downgrading Spain's sovereign rating by 2 notches to the lowest investment grade. Instead, traders chose to focus on some positive corporate tidings from French retailer Carrefour and U.K. luxury retailer Burberry.

The long-term sovereign credit rating for Spain is currently at 'BBB-', a level above junk status and the outlook on the long-term rating remained negative. The action was premised on the lack of a clear eurozone policy on resolving the debt crisis and the economic growth and budgetary performance of Spain fraught with risks.

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