Traders Likely To Wait And Watch Amid Strong Data

(RTTNews) - The major U.S. index futures are pointing to a slightly lower opening on Thursday, with sentiment reflecting lackluster risk sentiment even amid the release of some strong domestic data. Jobless claims fell unexpectedly and durable goods orders data came in roughly in line with estimates. Commodities are moving southward and the dollar is mixed. The retail space could come under pressure due to some disappointing retail earnings reports. With Fed Chair Janet Yellen's speech scheduled for tomorrow, traders may prefer to stay on the sidelines.   U.S. stocks retreated on Wednesday, as oil fell steeply and amid nervousness concerning Yellen's speech scheduled for Friday.  The averages opened slightly lower and moved about in a nervous manner till late trading. Subsequently, the averages saw further downside before closing moderately lower for the session.    The Dow Industrials ended down 65.82 points or 0.35 percent at 18,482, the S&P 500 Index closed 11.46 points or 0.52 percent lower at 2,175 and the Nasdaq Composite closed at 5,218, down 42.38 points or 0.81 percent.    Twenty-two of the thirty Dow components closed the session lower, while the remaining eight stocks advanced. Caterpillar (CAT), Merck (MRK) and UnitedHealth (UNH) were among the biggest decliners of the session, but Nike (NKE) rose sharply.    Among the sectors, gold and biotechnology stocks retreated steeply and oil service and basic material stocks also came under selling pressure.    On the economic front, the National Association of Realtors reported that existing home sales fell to a seasonally adjusted annual rate of 5.39 million units in July, down 3.2 percent from the 5.570 million-unit rate in June. Economists had expected a reading of 5.520 million units. Annually, existing home sales fell 1.6 percent.    The median price of an existing home fell 1.4 percent month-over-month to $244,100, rendering the annual rate to 5.3 percent. Single-family sales were down 2 percent compared to a 12.3 percent slump in condominium sales.     The Federal Housing Finance Agency's house price index rose a less than expected 0.2 percent month-over-month in June. The annual increase in house prices slowed to 5.6 percent from 5.7 percent.    Currency, Commodity Markets   Crude oil is slipping $0.10 to $46.67 a barrel. The October futures ended the previous session down $1.33 at a 1-week low of $46.77 a barrel.

The drop seen in the previous session came following the release of the weekly petroleum status report for the week ended August 19th, which showed that crude oil stockpiles rose by 2.5 million barrels to 523.60 million barrels. Stockpiles were at historically high levels for this time of year.

Gasoline inventories remained unchanged last week yet were well above the upper limit of the average range. Distillate inventories rose by 0.1 million barrels and were near the upper limit of the average range for this time of the year.

Refinery capacity utilization averaged 92.9 percent over the four weeks ended August 19th compared to 92.8 percent for the four weeks ended August 12th.

Gold futures are currently trading at $1,323.10 an ounce, down $6.60 from the previous session's close of $1,329.70 an ounce. On Wednesday, gold slumped $16.40.

On the currency front, the U.S. dollar is trading at 100.54 yen compared to the 100.45 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.1293 compared to yesterday's $1.1264. 

Asia

The major Asian markets ended Thursday's session mixed, with the uninspiring lead from Wall Street overnight, a muted performance by commodities and Fed Chair Janet Yellen's Jackson Hole address due on Friday all playing out in the minds of traders.     The Japanese market succumbed to the yen's strength in the Asian session. The Nikkei 225 Index opened lower and languished below the unchanged line till late afternoon trading. Although a recovery attempt briefly took it past the unchanged line, the index retreated yet again, closing down 41.35 points or 0.25 percent at 16,556.    Utility, housing, food, chemical, resource and pharma stocks came under selling pressure and the export space saw mixed sentiment, while financial stocks advanced.    Australia's All Ordinaries Index languished below the unchanged line throughout the session, ending near the lows of the day. The index was down 22.20 points or 0.39 percent at 5,631 at the close of trading.    China's Shanghai Composite Index lost 17.55 points or 0.57 percent before ending at 3,068, while Hong Kong's Hang Seng Index ended at 22,827, up 6.09 points or 0.03 percent.    On the economic front, data released by the Bank of Japan showed that the corporate service price index rose 0.4 percent year-over-year in July, ahead of the 0.1 percent increase expected by economists. In June, the index was up 0.2 percent. On a monthly basis, prices rose 0.4 percent. 

Europe   The major European markets are trading lower in early afternoon trading, although they have come off their early lows. Risk off mood prevails as traders await Yellen's speech.     After opening lower, European stocks saw further downside in reaction to a weak German business sentiment reading. However, with commodities recovering, the averages in the region have trimmed their losses.    Healthcare and auto stocks are leading the declines in Frankfurt. Merck KgaA, Fresenius, BMW, Volkswagen, Daimler and Continental are all down steeply. In Paris, auto, technology and resource stocks are retreating. The U.K. market is also seeing a sell-off in the resource space.    On the economic front, the results of a survey by IfO showed that sentiment among German businesses slipped unexpectedly in August. The business sentiment index fell to 106.2 in August from 108.3 in July, while economists expected an increase in the index to 108.5. The current conditions and expectations indexes also fell.    The total value of new orders received by the German construction industry decreased in June, data released by the German Federal Statistical Office showed.    The seasonally, working-day and price-adjusted orders in construction dropped 1.8 percent month-over-month in June. On a yearly basis, orders surged a working-day and price-adjusted 18.3 percent in June.    The results of a survey by statistical office INSEE showed that French manufacturing confidence weakened unexpectedly in August. The manufacturing sentiment index dropped to 101 in August from 103 in July. Economists had forecast the indicator to remain unchanged at 103.  

U.S. Economic Reports

First-time claims for U.S. unemployment benefits unexpectedly saw another modest decrease in the week ended August 20th, according to a report released by the Labor Department.   The report said initial jobless claims edged down to 261,000, a decrease of 1,000 from the previous week's unrevised level of 262,000. Economists had expected claims to rise to 265,000.    After reporting a steep drop in new orders for U.S. manufactured durable goods in the previous month, the Commerce Department released a report showing that durable goods orders rebounded by more than expected in the month of July.

The Commerce Department said durable goods orders surged up by 4.4 percent in July after tumbling by a revised 4.2 percent in June. Economists had expected orders to climb by about 3.7 percent compared to the 4.0 percent slump that had been reported for the previous month.

Excluding a jump in orders for transportation equipment, durable goods orders rose by 1.5 percent in July after edging down by 0.3 percent in June. Ex-transportation orders had been expected to tick up by 0.5 percent.     The Kansas City Federal Reserve is due to release its regional manufacturing index for August at 11 am ET. In July, the index was at -6.    The Treasury Department will release the results of its auction of 7-year notes at 1 pm ET.    Stocks in Focus   HP (HPQ) reported better than expected third quarter results, but its fourth quarter and full year earnings per share guidance was weak.    PVH (PVH) reported above-consensus second quarter earnings per share and issued positive guidance for the third quarter and the full year. 

Dollar Tree (DLTR) reported second quarter results that trailed estimates and issued negative revenue guidance for the third quarter. However, the company's earnings per share guidance is above the consensus estimate. Dollar General's (DG) second quarter results also missed estimates but it reaffirmed is 2016 earnings growth guidance.

Sears Holdings (SHLD) reported a loss on adjusted basis and a decline in revenues for its second quarter and warned of challenging times ahead.   Williams-Sonoma (WSM) reported in line second quarter earnings per share, but its revenues trailed estimates. The company also lowered its full year earnings and revenue guidance.    Guess? (GES) reported better than expected second quarter adjusted earnings, although its revenues were below estimates. The company's third quarter guidance was weak.    Autodesk (ADSK), Brocade (BRCD) and GameStop (GME) are among the companies due to release their quarterly results after the close of trading.