(RTTNews) - The major U.S. index futures are pointing to a higher opening on Thursday. Strong earnings reported by database giant Oracle
(ORCL) may set the stage for a positive open in today's session. The fact that the company is able to outperform despite trying economic conditions could give the markets a reason to cheer. Notwithstanding a huge loss reported by Bear Stearns
(BSC), the stock is up in pre-market trading. Nevertheless, the financial space may experience some anxiety amid speculation that Merrill Lynch
(MER) may report lackluster results and on news that SunTrust
(STI) is injecting $1.4 billion into money funds to shield them against losses. On the economic front, final third quarter GDP growth came in-line with expectations, while jobless claims rose by much more than had been expected.
After seeing some strength in morning trading on Wednesday, the major U.S. averages receded in the mid session. Despite a recovery in the afternoon, the Dow Industrials and the S&P 500 Indexes retreated in late trading.
The Dow Industrials lost 25.20 points or 0.19% to 13,207 and the S&P 500 Index fell 1.98 points or 0.14% to 1,453. Meanwhile, the Nasdaq Composite held ground after the mid-session collapse to close up 4.98 points or 0.19% at 2,601.
Among the Dow components, AT&T
(T), 3M Co.
(MMM), McDonald's
(MCD), General Motors
(GM), Walt-Disney
(DIS) and DuPont
(DD) declined sharply, while Intel
(INTC), Coca-Cola
(KO) and Altria
(MO) saw some strength.
Currency, Commodity Markets
The price of oil is rising $0.12 to $91.36 a barrel after it advanced $1.16 to $91.24 a barrel on Wednesday.
Yesterday, the U.S. Energy Information released its report on weekly oil inventories, which showed that crude oil stocks declined by 7.6 million barrels from the previous week to 296.9 million barrels. Inventories are now in the lower half of the average range for this time of the year.
Distillate inventories also saw downside, dropping by 2.1 million barrels. However, motor gasoline inventories rose by 3 million barrels. Refinery capacity utilization averaged 88.9% in the four weeks ended December 14th compared to 88.7% in the previous week and 89.2% in the year-ago period.
Gold futures, which eased $2 to $805.40 an ounce on Wednesday, are currently receding $2.50 to $802.90 an ounce.
On the currency front, the U.S. dollar is trading at 113.12 yen compared to the 113.4255 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is trading at $1.4346.
Asia
The major Asian markets ended Thursday's session on a mixed note. The Japanese market edged up marginally, while the Indian market also ended modestly higher. The Chinese market a posted significant gain. After the market closed today, the Chinese central bank announced an increase in its lending rate on 1-year loans by 18 basis points to a 9-year high of 7.29%. The tightening is seen as a measure to cool the red hot economy. However, the Hong Kong, Australian, South Korean and Taiwanese markets ended with losses.
Japan's Nikkei 225 average opened higher, but it gave back most of its gains over the course of trading to close up only 1.09 points or 0.01% at 15,032. The lackluster trading came amidst a much expected central bank decision to hold interest rates unchanged.
Nippon Oil gained 0.94%, while Inpex Holdings ended unchanged. Financial and mining stocks advanced significantly. Other gainers included Fast Retailing and Millea Holdings. The steel space was mixed. However, auto stocks came under selling pressure.
The Bank of Japan's monetary policy committee announced today that it is maintaining its uncollateralized overnight call rate at 0.5%. The decision was adopted unanimously by the 9-member policy board and was widely expected due to the recent soft economic readings. Yesterday, the Japanese government lowered its economic growth forecast for the fiscal year due to softness in housing starts. The government now estimates growth of 1.3% for the fiscal year ended March 31, 2008, significantly lower than its earlier estimate of 2.1%.
In its monthly assessment of economic and financial developments released today, the Bank of Japan said the Japanese economy is expanding moderately despite a slowdown in the pace of growth. The central bank also feels that the economy will continue to expand moderately, albeit at a slow pace.
After a positive start, Australia's All Ordinaries surrendered all its gains by late morning trading before moving into negative territory. Thereafter, the index continue to languish before closing down 36 points or 0.57% at 6,245, marking the seventh consecutive session of losses.
A majority of stocks declined in the session, with only IT and utility stocks showing some strength. Miners BHP Billiton and Rio Tinto fell sharply. The four major banks also receded in the session. In the media space, John Fairfax declined, while Seven Network and News Corp. advanced. Among retailers, Harvey Norman and David Jones fell, but Woolworths gained.
Hong Kong's Hang Seng Index ended Wednesday's session lower despite spending much of the session above the unchanged line. The Hang Seng lost 12.17 points or 0.05% to 27,017.
China related stocks were mostly lower, while property stocks revealed mixed sentiment. Financial stocks found buying interest.
The South Korean market, which opened after a day's break, showed some strength in early trading. By late morning trading, the buying momentum faltered, as the index moved back and forth across the unchanged line in a narrow range before receding sharply in late trading. The index closed down 17.10 points or 0.92% at 1,845.
Europe
The European markets are advancing on Thursday. The French CAC 40 Index is rising 0.75%, while the German DAX Index is gaining 0.85%. Meanwhile, the U.K. FTSE 100 Index is advancing 1.13%.
In Paris, Cap Gemini is rising over 2.30%, while EADS, Arcelor Mittal, Carrefour, Total, Accor, L'Oreal, Lagardere and Alcatel-Lucent are also up more than 1% each. Financial and utility stocks are also seeing some strength. However, construction and auto stocks are receding.
Among Frankfurt stocks, Continental, Henkel, BMW, Deutsche Post, Fresenius Medical Care, SAP and Daimler are advancing strongly. On the other hand, Infineon Technologies, Deutsche Postbank and Man are moving to the downside.
In the U.K., Johnson Matthey is gaining close to 7% in reaction to speculation that U.S.-based Dow Chemical Co.
(DOW) may seek to buy the company. Oil, retail and financial stocks are also seeing strength. Mining stocks are seeing mixed sentiment.
The National Statistical Office of the U.K. released its revised report on third quarter GDP, which showed that the economy expanded at an unrevised pace of 0.7% in the quarter. The year-over-year growth was revised up to a 3.3% rate from an earlier estimate of 3.2%.
The GfK Institute released the results of its consumer confidence survey, which showed that the forward looking consumer climate indicator for January rose 0.1 points to 4.5. Economists had forecast a reading of 4.
U.S. Economic Reports
A report released by the Bureau of Economic Analysis showed that the U.S. economy expanded at a 4.9% rate, which was in-line with the expectations of economists. The GDP growth was 3.8% in the second quarter.
The acceleration in third quarter growth was due to positive contributions from personal consumption expenditures, exports, non-residential structures, federal government spending and private inventory investment.