Market Hustle: Stock Futures Sink Following Rise in Jobless Claims
NEW YORK (TheStreet) -- U.S. stock futures were sinking further Thursday after a rise in weekly U.S. initial jobless claims, and a day after Federal Reserve Chairwoman Janet Yellen seemed to present herself in a surprisingly hawkish light.
- Dow Jones Industrial Average futures were down 35 points, or 41.17 points below fair value, to 16,104, S&P 500 futures were down 3.75 points, or 4.57 points below fair value, to 1,848.5, and Nasdaq futures were off 9 points, or 8.78 points below fair value, to 3,665.3.
- Weekly initial jobless claims for the week ended March 15 rose by 5,000 to 320,000, vs. the average economist estimate of 325,000. The four-week moving average representing longer-term trends fell 3,500 to 327,000.
- The U.S. economic calendar on Thursday also will include February existing home sales at 10 a.m. EDT, the Philadelphia Fed Index for March at 10 a.m., and the Conference Board's Index of Leading Indicators for February at 10 a.m. The Philly Fed Index is expected to show a rise to 3.8 from negative 6.3 in February.
- In company news, Lennar (LEN) was gaining 2.08% in premarket trading after beating fiscal first-quarter earnings expectations by 7 cents at 35 cents a share on better-than-expected revenue and an 18% increase in average sales prices. ConAgra Foods (CAG) was higher by 1.39% after its fiscal third-quarter earnings topped expectations by 2 cents at 62 cents a share. Sony (SNE) was also making the headlines following reports that the company is looking to reduce ties with about three-quarters of its suppliers to help expedite bringing products to the market.
- U.S. stocks closed lower but bounced off session lows Wednesday after Yellen explained the central bank's revised forward guidance, including a plan to drop the unemployment threshold. The Dow and S&P 500 tanked during Yellen's press conference that followed the Fed's policy meeting when Yellen said that the period between the end of so-called tapering and the beginning of hiking interest rates could be just six months.
- Yellen's comments also rattled the global markets, which were all heading lower at the suggestion that the first hike in interest rates could take place in the summer of 2015. The FTSE 100 in London was down 1.01%, the DAX in Germany was falling 0.93%, the Hong Kong Hang Seng closed down 1.79% and the Nikkei 225 in Japan fell 1.65%.
- Despite the less-dovish-than-expected tone Yellen seemed to communicate on Wednesday, S&P Capital IQ chief equity strategist, Sam Stovall, noted that from a technical perspective the S&P 500 is maintaining the uptrend that has been in force for the last few years and he identifies 1,918 and 2,030 as upside targets using the 161.8% and 261.8% Fibonacci extension projections of the last decline.
- Stovall also said in his note that the S&P 500 remains well above its 30-week exponential moving average, which he said has been a good barometer of significant dips over the past year. There remains robust support in the 1,627 to 1,707 area and only a breach of this zone along with a piercing of the lower trend channel would alter Stovall's bullish bias.
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