After a day of mixed trading on Wednesday, stock index futures pointed to a firm open on Wall Street Thursday. Yesterday, stocks made little progress, as the Dow Jones Industrial Average ($INDU) edged down 8 points but the Nasdaq ($COMPQ) gained 11.5. One hour before the bell Thursday morning, early indications pointed to modest gains in both the Dow and the Nasdaq, as investors react to a dip in oil prices, a series of upbeat earnings reports, and economic news that carried no unpleasant surprises.
One hour before the start of trading Thursday, the Commerce Department reported that Gross Domestic Product [GDP] grew at a revised 4.4% rate during the first quarter. Higher government spending, inventory build ups, and accelerating home construction, helped boost GDP from January to March. The readings were above last month’s initial estimates of 4.2%, but matched economist estimates.
Meanwhile, a report on weekly jobless claims released before the bell was a bit worse-than-expected. According to the Labor Department, filings for jobless benefits fell by 3,000 to 344,000 last week. Economists were looking for a decline in weekly jobless claims to 335,000. The four-week moving average of jobless claims, which is a more stable measure, rose to 335,500 from a multi-year low of 334,000. Stock index futures were little changed following the reports on GDP and weekly jobless claims.
If the economic data failed to move the markets early Thursday, a drop in oil prices might help lift spirits on Wall Street. Crude oil prices eased after US Energy Secretary Spencer Abraham told reporters in Moscow that there are signs of increasing supplies in countries like Mexico, Russia and Nigeria. Prices fell 60 cents to $40.10 a barrel and the decline might help ease recent jitters about the negative impact of rising energy prices on the US economy as well as corporate profits.
In individual stock news, Coca Cola (KO) is set to move higher and help boost the Dow Jones Industrial Average after UBS Securities raised the softdrink maker to “buy” from “neutral” and set a price target of $60.00 a share. According to the brokerage firm, Coca Cola will benefit from better sales of new products. Shares, which are among the thirty stocks included within the Dow Jones Industrial Average, rose 50 cents to $50.72 following the upgrade.
Costo (COST) is poised to advance after the retailer said first quarter profits rose 30% from last year to $198.7 million, or 42 cents a share. The results easily topped analyst estimates of 38 cents share. Dollar General (DG) may be active ahead of its earnings report due out later today. Finally, Tech Data (TECD) is expected to open sharply higher after posting better than expected earnings. The computer company said first quarter profits rose to 59 cents a share from 38 cents a year earlier, and well ahead of analyst estimates of only 49 cents a share.
Frederic Ruffy Senior Writer Optionetics.com ~ Your Options Education Site
Market Data 
Markets 
AI
