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Futures Stay Weak After Claims Data, PPI

CNBC.com
Thursday, 16 Sep 2010 | 9:23 AM ET

U.S. stock index futures remained lower after news of a positive report on jobless claims and a slight rise in an inflation index.

Futures had edged lower earlier ahead of the open Thursday as Treasury Secretary Timothy Geithner prepared to bolster calls for the Chinese yuan to appreciate more quickly.

Jobless claims fell unexpectedly by 3,000 to 450,000, the lowest level in two months, the U.S. Labor Department said.The figure had been expected to rise to 460,000. At 450,000, jobless claims are within a range considered by economists to create sustainable job growth. Claims also were significantly below the high of 504,000 reached a month ago.

The August Producer Price Index rose 0.4 percent, slightly more than expected, and the biggest increase in five months, according to the Labor Department. The PPI rose 0.2 percent in July. Core PPI was 0.1 percent in August, also in line with expectations, after rising 0.3 percent in July.

Also on Thursday, the U.S. current account deficit widened in the second quarter to $123.3 billion, or 3.4 percent of gross domestic product on a rise in imports of capital goods, automotive products and consumer goods, according to the U.S. Commerce Department.

The major indexes managed to close higher Wednesday and continue the September rally, despite a volatile session.

In one piece of positive news, nearly 51 percent of individual investors surveyed by the American Association of Individual Investorswere bullish for the week ended September 15, up 7 percent from last week.

Economic bellwether FedEx said its quarterly profit doubled, although it was just shy of expectations. The company also said it plans to cut 1,700 jobs to trim costs. Shares fell nearly 3 percent in premarket trading, as did shares of rival UPS .

In other earnings news, Pier 1 Imports reported better-than-expected results for the second quarter ended August 28 on strong sales, costs controls, and fewer promotions. The home decor chain's net income was $14.4 million, or 12 cents a share, compared with a loss of $15.8 million, or 17 cents a share a year earlier. Pier 1's shares were higher in premarket trading.

Asian stocks finished mostly lower with the Nikkei 225 ending flat after the yen's decline against the dollar failed to continue. Japanese policy makers had hoped to see extended weakness in the currency as a result of market intervention Wednesday.

Japanese Prime Minister Naoto Kan indicated Thursday that the country was prepared to intervene again to ease the currency's strength in a bid to help the export sales. Meanwhile, the Bank of Japan said it is ready to introduce more quantitative easing in October if necessary, according to reports.

The dollar weakened slightly against the yen in morning trade while it also fell against a basket of foreign currencies.

European shares also fell into the red with disappointing economic data weighing on investor sentiment.

Geithner said Wednesday that the yuan is appreciating too slowly and is due to reinforce those calls before a Senate Banking Committee hearing on China's currency policy Thursday morning and then in front of the House Ways and Means subcommittee later in the day.

The Philadelphia Federal Reserve survey for September, which gives a reading of the manufacturing sector in the Philadelphia Fed's district, is released at 10 a.m.

On the Calendar:

THURSDAY: Philly Fed survey; after-the-bell earnings from Oracle and Research In Motion
FRIDAY: CPI, consumer sentiment

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