Benzinga - by Shanthi Rexaline, Benzinga Editor.
U.S. stocks could build on their gains on Thursday, with the index futures holding modestly higher. Traders seemed to be cautiously optimistic about incoming economic data reinforcing hopes that the Federal Reverse will soon begin to reverse rates. Bond yields edged down, extending their fall seen since Tuesday’s spike. Earnings news for the day has largely been disappointing, while crude oil prices declined for a second day.
Cues From Wednesday’s Trading:
U.S. stocks advanced strongly on Wednesday, benefiting from buying that followed the previous session’s inflation-induced sell-off. Aiding sentiment were comments from Chicago Fed President Austan Goolsbee, who said even if inflation rises a big hit for a few months, it will likely be consistent with the path toward the central bank’s 2% target.
Traders also cheered a pullback in bond yields after the spike past the 3% mark for the 10-year Treasury note on Tuesday.
The major averages gap-opened higher but the Dow Industrials surrendered its gains and moved back and forth across the unchanged line in the mid-session. The 30-stock blue-chip average moved decisively higher in late-afternoon trading before ending with moderate gains.
The Nasdaq Composite and the S&P 500 Index hovered above the unchanged line throughout the session, showing notable strength in the afternoon.
Nine of the 11 S&P sector classes advanced, with energy and consumer staple stocks bucking the uptrend. Industrial and communication services stocks were among the biggest gainers of the session.
Small-cap stocks outperformed their bigger counterparts, and the Russell 2,000 Index closed 2.44% higher.
| Index | Performance (+/-) | Value |
| Nasdaq Composite | +1.30% | 15,859.15 |
| S&P 500 Index | +0.96% | 5,000.62 |
| Dow Industrials | +0.40% | 38,424.27 |
| Russell 2000 | +2.44% | 2,012.10 |
Analyst Color:
A Morgan Stanley analyst is confident of the better times to last. “Investors should expect more volatility, and times when an overall bullish view of the market will be in jeopardy. That said, there are five significant reasons to support why 2024 could be another good year for equity investors,” said Andrew Slimmon, Managing Director at Morgan Stanley Investment Management.
The reasons outlined by the analyst are:
- An uptick in retail fund flows
- Incumbent being on the ballot for the presidential election
- Fed ending rate hikes
- Cooling inflation
- Market bread turning positive
Futures Performance On Thursday
| Futures | Performance (+/-) |
| Nasdaq 100 | +0.21% |
| Dow | +0.14% |
| S&P 500 | +0.10% |
| R2K | +0.65% |
In premarket trading on Thursday, the SPDR S&P 500 ETF Trust (NYSE:SPY) rose 0.25% to $499.84 and the Invesco QQQ ETF (NASDAQ:QQQ) gained 0.29% to $434.46, according to Benzinga Pro data.
Upcoming Economic Data:
The Labor Department is scheduled to release the weekly jobless claims report at 8:30 a.m. ET. Economists, on average, expect the number of individuals claiming unemployment benefits to come in at 220,000 in the week ended Feb. 10, up from 218,000 in the previous week.
The results of two regional manufacturing surveys are due at 8:30 a.m. ET. The New York Fed’s business activity index is expected to remain in negative territory, with a reading of -13.5 expected for February, although an improvement from -43.7 in January. The Philadelphia Fed’s diffusion index of business activity is expected to come in at -9 for February, a slight improvement from -10.6 for January.
The Commerce Department’s retail sales report for January is also due at 8:30 a.m. ET. The consensus estimate calls for a 0.2% month-over-month drop in retail sales, reversing some of the 0.6% growth in December. Retail sales, excluding autos, may have climbed 0.3%, slightly slower than December’s 0.4% growth.
The Labor Department will release its import and export prices report for January at 8:30 a.m. ET.
The Federal Reserve’s industrial production report is due at 9:15 a.m. ET. It is expected to show a 0.2% month-over-month increase in industrial output in January. In December, output rose a more modest 0.1%.
The National Association of Home Builders will release the results of its homebuilder sentiment survey at 10 a.m. ET. The index is expected to come in at 46 for February, suggesting continued erosion in confidence, although up from 44 in January.
Fed Governor Christopher Waller is scheduled to speak at 1:15 p.m. ET.
Atlanta Fed President Raphael Bostic will make a public appearance at 7 p.m. ET.
Stocks In Focus:
- AppLovin Corporation (NASDAQ:APP) climbed over 24.5% in premarket trading following its quarterly earnings announcement.
- Other stocks reacting to earnings are Informatica Inc. (NYSE:INFA) (up over 17%), Pegasystems Inc. (NASDAQ:PEGA) (up 13.7%), Albemarle Corporation (NYSE:ALB) (down over 5%), Cisco Systems, Inc. (NASDAQ:CSCO) (down over 4.7%), Fastly, Inc. (NYSE:FSLY)(down over 20%), Tripadvisor, Inc. (NASDAQ:TRIP) (up about 4.70%) and Twilio Inc. (NYSE:TWLO) (down over 12.50%).
- CBRE Group, Inc. (NYSE:CBRE), Crocs, Inc. (NASDAQ:CROX), Deere & Company (NYSE:DE), Hanesbrands Inc. (NYSE:HBI), SunPower Corporation (NASDAQ:SPWR), US Foods Holding Corp. (NYSE:USFD)and Wendy’s Company (NASDAQ:WEN) are among the noteworthy companies reporting earnings ahead of the market open.
- Those reporting after the close include Coinbase Global, Inc. (NASDAQ:COIN), BJ’s Restaurants, Inc. (NASDAQ:BJRI), Applied Materials, Inc. (NASDAQ:AMAT), DoorDash, Inc. (NASDAQ:DASH), DraftKings Inc. (NASDAQ:DKNG) and Roku, Inc. (NASDAQ:ROKU).
Crude oil futures slipped 0.87% to $75.97 in early European session on Thursday after the commodity snapped a seven-session winning streak and ended down 1.58% on Wednesday. The benchmark 10-year Treasury note edged down 0.041 percentage points at 4.226%.
Major global markets were firmer on Thursday, with Asian stocks closing mostly higher, encouraged by the positive cues from Wall Street. While China continues to remain closed, the Malaysian, South Korean, and New Zealand markets fell modestly. European markets traded solidly higher by late morning.
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