Futures Rally After China Cut, Jobless Claims
U.S. stock futures held their gains Thursday following the weekly jobless claims report and after China's central bank unexpectedly announced that will cut its interest rates.
In a surprising move, China's central bank cut its key interest rateby 25 basis points, saying the move would take effect Friday. In addition, banks were granted additional flexibility to set competitive lending and deposit rates in step along the path of liberalization. The moves come as China looks to bolster its sagging economic growth.
Meanwhile, claims for unemployment benefits fell more than expected last weekfor the first time in April, declining 12,000 to a seasonally adjusted 377,000, according to the Labor Department. Economists polled by Reuters had expected a reading of 380,000. The four-week moving average for new claims increased 1,750 last week to 377,750.
Fed Chairman Ben Bernanke testifies before the Congressional Joint Economic Committee on the economic outlook at 10:00 a.m. ET. His comments are likely to be watched carefully for any hint of further easing movesby the Fed in the wake of last week’s disappointing May employment and ongoing concerns in the euro zone.
On Wednesday, Fed's vice chair Janet Yellen made a case for further easing, citing risks from the ongoing housing woes, a weak jobs market and worsening financial conditions.
Investors also saw some evidence that European policymakers would act to prop up Spain’s banking sector, sending European shares higher, adding to the previous session's sharp rally.
Spain has not yet requested assistance and has resisted being placed under international supervision, but German and European Union officials are urgently exploring ways to rescue the country's banking sector, sources told Reuters.
Spain met strong demand when it sold2.1 billion euros ($2.62 billion) of medium- and long-term bonds, passing a key test of its ability to tap investors after a minister said earlier this week the country was being cut off from the markets.
Among earnings, Lululemon Athletica slumped after the yoga-apparel retailer posted higher quarterly profit, but said same-store sales growth would slow.
Men's Wearhouse plunged after the men's clothing retailer posted quarterly results that missed estimates and projected weak earnings in the upcoming quarter.
Meanwhile, JM Smucker edged higher after the Jif peanut butter maker topped earnings and revenue expectations.
Green Mountain Coffee Roasters is in talks with pharmaceutical companies about developing drinks for its Keurig brewers that it hopes could aid the health of consumers, a senior executive said.
Chesapeake Energy need not delay its scheduled annual meeting on Friday to allow shareholders more time to investigate the financial dealings of the natural gas company's embattled chief executive, Aubrey McClendon, a federal judge ruled.
Oracle launched a new suite of cloud-based products on Wednesday to try to catch up with smaller but more nimble vendors, such as Salesforce.com , in the business of hosting and distributing software via the Internet.
Goodyear Tire & Rubber acquired 100 percent ownership of its NipponGiant Tire unit in Japan for an undisclosed amount.
—By CNBC’s JeeYeon Park (Follow JeeYeon on Twitter: @JeeYeonParkCNBC)
Coming Up This Week:
THURSDAY: Bernanke speaks, quarterly services survey, Fed's Lockhart speaks, Fed's Kocherlakota speaks, consumer credit
FRIDAY: International trade, wholesale trade, Fed's Kocherlakota speaks, Chesapeake annual meeting
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