Futures Rise After Claims News; Dow Leaders Gain
Stock index futures pointed to a higher open for Wall Street as jobless claims fell more than expected and earnings from Dow components gave rise to hopes for an economic recovery.
Initial claims for unemployment benefits fell23,000 to 452,000 for the week ended Oct. 16, the Labor Department said Thursday. The forecast was for claims to drop to 455,000, down from a revised 475,000 the week before, according to analysts surveyed by Reuters.
Caterpillar, a barometer of health in the construction and housing industries, easily beat expectations with its earnings and raised its full-year outlook. The company attributed emerging market growth for its boost in profitability.
AT&T also rose before the bell, as it matched analyst expectations of 55 cents per share. Fellow Dow component Travelers also beat estimates and saw its shares mover higher premarket. McDonald’s gained nearly 2 percent after it exceeded estimates by four cents a share.
Investors also digested data showing China's growth cooled in the third quarter even as inflation edged higher.
The major indexes in Europe were broadly higher, as money moved into defensive stocks.
Continuing thegood news for airlines, Southwest Airlines posted a profitfor the third-quarter Thursday, compared with a loss a year earlier, as demand returned.
Among regional banks, profit for the third-quarter doubled at PNC Financial ServicesGroup on lower loan losses, and the sale of a back-office unit to Bank of New York Mellon . Revenue at the bank fell 8 percent, however.
Eli Lilly posted better-than-expected profits, thanks to costs savings, but revenues fell short of estimates. The drugmaker earned $1.3 billion, or $1.18 a share, compared with $942 million, or 86 cents a share a year ago when Lilly had several special charges. Global revenue rose to $5.65 billion, shy of the $5.77 billion expected by analysts.
Ebay is among other stocks to watch after it reported quarterly profit and revenue that beat expectations after the close on Wednesday. Netflix also reported strong resultsas it added subscribers.
Swiss bank Credit Suisse said earlier on Thursday its third-quarter net profit tumbled 74 percent as sluggish equities trading halved investment banking earnings from the previous quarter.
Banking shares came under pressure in Europe after the Credit Suisse numbers.
Uncertainties about company earnings and economic numbers prompted investors to move into food, beverages and personal goods shares, traditionally seen as defensive.
The Conference Board's Leading Economic Indicators Index, due at 10 a.m., is forecast to remain unchanged at 0.3 percent in September.
And the Philadelphia Federal Reserve Bank is expected to say its business activity index came in at 1.4 in October, recovering from -0.7 in September, Briefing.com said. Any reading below zero represents contraction in the sector.
On the Calendar Next Week:
THURSDAY: ECB Meeting, leading indicators, natural gas inventories, money supply, Kansas City Fed President Hoenig speaks, CBO Director Elmendorf speaks; after-the-bell earnings from American Express and Amazon.
FRIDAY: G20 Finance Ministers & Central Bank Governor's Meeting; before-the-bell earnings from Verizon, Exelon, Ingersoll-Rand and Schlumberger.
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