Market Commentary and Intraday News

Wary Wall Street On Pause Mode Ahead Of Data Deluge

200 days ago

(RTTNews) - After yesterday's lackluster run, Wall Street has once again turned defensive ahead of a data onslaught. The major U.S. index futures point to a modestly lower opening on Thursday. With the earnings season still going in full throttle, traders get to digest some key economic data on the manufacturing sector, jobs and consumer confidence. Notable among the economic data would be the ADP's private sector payrolls data for October, which is considered the precursor for the Labor Department's non-farm payrolls report due on Friday. Auto sales and chain store sales could also dictate the market mood.

As of 6:15 pm ET, the Dow futures are receding 28 points, the S&P 500 futures are declining 4.30 points and the Nasdaq 100 futures are receding 2.75 points.

U.S. stocks moved about in a lackluster fashion on Wednesday when they re-opened, closing the session on a mixed note. Concerns about the impact Super storm Sandy may have on growth and a weak regional manufacturing data accentuated the caution among investors.

On the economic front, the ADP National Employment report is scheduled to be released at 8:15 am ET. The consensus expectations are for an addition of 155,000 jobs by the sector in October following an addition of 162,000 jobs in September.

The Labor Department is due to release its customary jobless claims report for the week ended October 27th at 8:30 AM ET. Economists expect claims to increase to 369,000, flat with last week.

Additionally, the Labor Department will release its advance estimate of third quarter productivity and costs at 8:30 am ET. Economists expect non-farm productivity growth of 2 percent, slower than the 2.2 percent growth in the second quarter. Unit labor costs may have risen 1.2 percent compared to a 1.5 percent increase in the previous quarter.

The results of the manufacturing survey of the Institute for Supply Management, which are based on data compiled from purchasing and supply executives nationwide, are due out at 10 am ET. Economists expect the index to show a reading of 51.5 for October, flat with last month.

The manufacturing index rose to 51.5 in September from 49.6 in August. Economists had expected the sector to continue to contract. The new orders index climbed to 52.3 from 47.1 and the order backlogs index rose 1.5 points to 44. The employment index

The Commerce Department's construction spending report to be released at 10 am ET is expected to show a 0.6 percent increase in September following a decline by the same magnitude last month.

Around the same time, the Conference Board will release the results of its consumer confidence survey for October. Economists expect the index to improve to 74 from 70.3 in September. The Energy Information Administration is scheduled to release its weekly petroleum inventory report for the week ended October 26th at 11 AM ET.

Individual automakers are scheduled to release their monthly U.S. sales results for October. Economists expect domestic vehicle sales of 14.8 million for October, down from 15 million in September.

In corporate news, Costco Wholesale (COST) reported comparable store sales growth of 7 percent for the four weeks ended October. Murphy Oil (MUR) reported a decline in its third quarter, while its revenues exceeded estimates. Hertz's (HTZ) third quarter earnings beat estimates, while its revenues were sub-par. Nevertheless, the company affirmed full year guidance. Hot Topic (HOTT) reported below-consensus sales for its third quarter, while it reaffirmed its earnings guidance that surrounded the consensus estimate.

Among insurers, MetLife (MET) reported better than expected third quarter operating earnings. Allstate's (ALL) and Unum's (UNM) third quarter earnings also beat estimates.

BMC Software (BMC) reported in line earnings for its third quarter, while its revenues trailed estimates. The company reaffirmed its 2013 earnings guidance and also announced a new $1 billion stock buyback program. Visa (V) reported better than expected fourth quarter earnings and revenues. The company's board authorized a new $1.5 billion buyback program for its Class A share.

The major Asian markets closed mixed, as encouragement derived by a positive Chinese manufacturing reading was offset to some extent by nervousness over a slew of economic data released from the U.S. overnight. Some insipid domestic corporate earnings also weighed on sentiment.

A survey conducted by the China Federation of Logistics and Purchasing revealed.
The purchasing managers index, an indicator of China's factory activity, rose to 50.2 in October from 49.8 in September.

Japan's Nikkei 225 closed up 18.58 points or 0.21 percent at 8,947. Australia's All Ordinaries languished below the unchanged line throughout the session before closing down 55.50 points or 1.22 percent at 4,480. A weak domestic manufacturing reading spoiled the mood. The market witnessed a broad based sell-off, with energy, consumer staple and material stocks leading the decline. Hong Kong's Hang Seng closed at 21,822, up 180.05 points or 0.83 percent.

European stocks are posting uneasy gains ahead of a slew of U.S. data. On the corporate front, Shell (RDS) reported an increase in its third quarter profits that were higher than what most analysts had predicted. U.K. banking group Lloyds reported a loss, hit by $1.6 billion worth of insurance charges.

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