U.S. stock index futures edged higher on Thursday, after signs that the labour market is stabilizing and home construction remains steady.
The number of Americans applying for unemployment benefits edged up slightly last week but remained at a level consistent with modest gains in hiring. Unemployment benefit applications rose by 2,000 to a seasonally adjusted 366,000, the Labor Department said. The less volatile four-week average fell by 5,500 to 363,750. That was the lowest level since late March.
U.S. builders slowed their pace of housing construction slightly in July. But in a hopeful sign for future construction, applications for building permits rose to the highest level since August 2008. The Commerce Department says construction of single-family homes and apartments dipped 1.1 per cent in July compared with June, to a seasonally adjusted annual rate of 746,000. In June, the rate had been 754,000, the fastest pace since October 2008.
The S&P capped off its longest win streak since December 2010 on Aug. 10, boosted by expectations for more stimulus from central banks in the United States and euro zone to stimulate their respective economies in September.
But the index has stalled in more recent sessions, unable to convincingly break above the 1,405 level, which has acted as a stiff resistance point.
Cisco Systems Inc. rose 5.9 per cent to $18.38 in premarket trading after the world’s largest network equipment maker offered little hope that dire economic conditions in Europe would come to an end any time soon but announced a 75 per cent dividend hike and posted quarterly results that beat estimates.
Wal-Mart shed 3.4 per cent to $71.90 in premarket trade as the world’s largest retailer posted a bigger-than-expected jump in quarterly profit but forecast full-year earnings that could fall short of Wall Street expectations.
Facebook Inc. dipped 2 per cent to $20.77 before the opening bell. Shares are set to hit the market Thursday after a lockup period, preventing some insider sales, comes to an end.
Later in the session at 10:00 a.m. (ET), the Philadelphia Federal Reserve Bank releases the August business activity survey. Economists forecast a reading of –5.0, versus –12.9 in July. A report from the New York Federal Reserve on Thursday showed factory activity in New York state contracted in August for the first time since October 2011.
S&P 500 futures rose 1.8 points and were above fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures gained 15 points, and Nasdaq 100 futures added 1.5 points.
Retailer Sears Holdings Corp. reported a quarterly loss in line with Wall Street estimates as lower expenses offset weak sales.
Applied Materials forecast current-quarter revenue below expectations and its chief executive hinted the top chip-gear maker could shed poorly performing non-core businesses. Its shares fell 4.41 per cent to $11.28 in premarket trade.
Dollar Tree fell 6 per cent to $47 in light premarket trade after the discount retailer posted second-quarter earnings and gave its outlook for the third-quarter and full-year.
S&P 500 companies scheduled to post results on Thursday include GameStop Corp, Gap Inc and Ross Stores Inc.
With earnings season winding down, Thomson Reuters data shows that of the 463 companies in the S&P 500 that have reported earnings through Wednesday morning, 67.6 per cent beat analysts’ expectations, about the same rate as over the past four quarters.
European shares edged marginally lower in quiet trade as the recent rally lost steam waiting for central banks to act to boost growth and with China warning overnight its trade outlook for 2012 was worsening. [.EU}Asian shares inched higher but gains were limited as investors waited for more clues over the timing and extent of any further stimulus to tackle the euro zone’s debt crisis and support global growth.