The Before the Bell report is updated throughout the morning to reflect latest developments. Colin Cieszynski will return.
The European Central Bank injected markets with a shot of adrenaline on Thursday, announcing additional monetary stimulus to support the region's tepid growth and lifting European stocks and North American futures in the process.
After disappointing the market in December, ECB President Mario Draghi exceeded expectations by cutting interest rates and significantly expanding quantitative easing measures.
The central bank pushed its deposit rate further into negative territory, as investors had anticipated, but also unexpectedly cut its key lending rate to zero. The bond buying program will also be expanded in size and scope to include purchases of non-bank corporate bonds.
The euro sank a full cent against the dollar to a one-week low of $1.0863 per dollar from around $1.0970 before the announcement. The Canadian dollar was relatively unchanged.
Although markets have not been welcoming of negative interest rates lately, the ECB's measures were met with immediate relief. The Stoxx Europe 600 spiked by about 2 per cent in the minutes after the announcement. And U.S. and Canadian stocks look set to open sharply higher; futures for the Dow Jones industrial average are about about 0.8 per cent and S&P 500 futures are up nearly 1 per cent - roughly double where they say earlier this morning ahead of the ECB announcement.
In a press conference in Frankfurt following the decision, Mr. Draghi said the package of measures was "comprehensive," and that he sees rates at present or lower levels for an extended time. He said that risks to the euro-area growth outlook are still to the downside and the rate of inflation will remain negative in coming months before picking up later in the year.
"It's shock and awe," Neil Jones, head of hedge-fund sales at Mizuho Bank Ltd. in London, told Bloomberg News. "He delivered. It's well beyond market expectations and expectations were quite high anyway. He came up with the goods. The euro is trading lower and should continue to do so."
"This was a much bigger bazooka than the market was expecting and shows the ECB trying to get ahead of the confidence curve after learning its lesson," Saxo Bank's head of FX strategy, John Hardy, told Reuters.
Here's the latest look at the market numbers, and more on what's going on this morning.
MARKET DATA:
Futures
S&P 500 +0.6 per cent; Dow +0.7 per cent; Nasdaq: +0.8 per cent
Equities
Hong Kong's Hang Seng -0.1 per cent per cent
Shanghai composite index -2.0 per cent
Japan's Nikkei 225 +1.3 per cent
London's FTSE +0.8 per cent
Germany's DAX +2.6 per cent
France's CAC 40 +3.9 per cent
Commodities
WTI crude oil (Nymex April) +0.29 per cent at $38.40 (U.S.) a barrel
Gold (Comex April) -1.47 per cent at $1,238.90 (U.S.) an ounce
Copper (Comex May) +0.11 per cent at $2.23 (U.S.) a pound
Currencies
Canadian dollar -0.0021 at 75.30 cents (U.S.)
U.S. dollar index +0.895 at 98.068
Bonds
U.S. 10-year Treasury yield -0.016 at 1.88 per cent
KEY ECONOMIC RELEASES
Filings for U.S. unemployment benefits fell last week to the lowest level in five months as the number of firings remained consistent with a solid labor market. Jobless claims dropped by 18,000 to 259,000 in the week ended March 5, the fewest since mid-October, from a revised 277,000 in the prior period, a Labor Department report showed. The median forecast of 48 economists surveyed by Bloomberg called for 275,000.
Canadian new home prices rose in January, driven by higher costs in Vancouver and Toronto, data from Statistics Canada showed on Thursday, highlighting the ongoing strength of the country's hottest markets. The national 0.1 per cent price gain fell slightly short of economists' expectations for an increase of 0.2 per cent.
Canadian industrial and manufacturing capacity rates both fell in the fourth quarter from the third quarter, Statistics Canada said on Thursday. Canadian industrial production capacity fell 0.5 percentage points to 81.1 percent in the fourth quarter on declines in construction, mining and oil and gas extraction. The manufacturing sector edged down 0.1 percentage points to 83.3 percent of capacity on non-durable manufacturing such as food and plastics.
KEY CORPORATE NEWS
Empire Co., the company behind the Sobeys grocery chain has written down the value of its western business, primarily the Safeway chain, resulting in a loss of $1.36 billion in its latest quarter. The loss was largely due to a recognition that the long-term value of the Safeway business is lower than previously estimated. Excluding that writedown and certain other items, Empire Co. would have had $82.5 million of adjusted earnings in its fiscal third quarter — down 36.1 per cent from $118.6 million. After adjustments, Empire earned 30 cents per share in the 13 weeks ended Jan. 30. The Street was expecting EPS of 46 cents. Revenue of $6.03-billion was above Street estimates of $5.80-billion.
Auto parts maker Linamar reported quarterly EPS of 1.46 vs. estimates for $1.34
First Quantum Minerals Ltd. will sell its Kevitsa mine in Finland for $712 million to Boliden AB as part of plans to dispose of assets to reduce debt by $1 billion.
Earnings include: Ag Growth International Inc.; Algonquin Power & Utilities Corp.; Altius Minerals Corp.; Athabasca Oil Corp.; Bird Construction Inc.; Canadian Energy Services & Technology Corp.; Childrens Place Inc.; Detour Gold Corp.; Franco-Nevada Corp.; Imvescor Restaurant Group Inc.; Intertape Polymer Group Inc.; K-Bro Linen Inc.; KP Tissue Inc.; Lumenpulse Inc.; Penn West Petroleum Ltd.; PFB Corporation; Premium Brands Holdings Corp.; Tamarack Valley Energy Ltd.; Total Energy Services Inc.; Transat AT Inc.; Xtreme Drilling and Coil Services Corp.
Also see: Thursday's small-cap stocks to watch
With files from wire services
Tim Shufelt