Positive Data Could Support Even While Reigniting Rate Fears

(RTTNews) - The major U.S. index futures are pointing to a higher opening on Thursday,  with positive economic data and the commodity rally lending support. Crude oil futures are holding barely above the $50-a-barrel mark and most commodities are higher. The dollar is weak as strong durable goods orders data and a bigger than expected drop in jobless claims dragging the currency on rising rate hike expectations. Earnings news has been mixed. The mood across the Atlantic is mixed. Given the recent run up, any optimism generated by the positive data could be tempered by rate hike fears.   U.S. stocks advanced solidly on Wednesday, ending at nearly one-month highs amid buying triggered by the news of a Greek bailout deal.    The major averages opened higher and saw further upside in the first hour of trading before showing a consolidation move for the rest of the session. The Dow Industrials added 145.46 points or 0.85 percent before ending at 17,852, the S&P 500 Index closed 14.48 points or 0.70 percent higher at 2,091 and the Nasdaq Composite Index ended at 4,895, up 33.84 points or 0.70 percent.    Twenty-six of the thirty Dow components ended the session higher, while the remaining four stocks closed lower. Caterpillar (CAT), Goldman Sachs (GS) and IBM (IBM) were among the best performers of the session, but Nike (NKE) fell sharply.    Among the sectors, resource, financial, biotechnology and computer hardware stocks saw significant strength during the session.    On the economic front, the Federal Housing Finance Agency's house price index for March rose 0.7 percent month-over-month in March, ahead of the 0.5 percent growth expected by economists. Annually, house prices climbed 6.1 percent, faster than the 5.6 percent increase in February.    A flash estimate released by Markit showed that its U.S. service sector index fell to 51.2 in May from 52.1 in April.    Currency, Commodity Markets

Crude oil futures for July delivery are rising $0.54 to $50.10 a barrel after advancing $0.94 to $49.56 a barrel on Thursday.     The previous session's increase came amid the release of the weekly petroleum status report, which showed that crude oil stockpiles fell by 4.2 million barrels to 537.1 million barrels in the week ended May 20th. Despite the drop, stockpiles were at historically high levels for this time of the year.   Distillate inventories declined by 1.3 million barrels yet remained well above the upper limit of the average range for this time of the year. Meanwhile, gasoline inventories rose by 2 million barrels and were well above the upper limit of the average range.    Refinery capacity utilization averaged 89.7 percent over the four weeks ended May 20th compared to 89.3 percent for the four weeks ended May 13th.   Gold futures are currently trading at $1,226.80 an ounce, up $3 from the previous session's close of $1,223.80 an ounce. On Thursday, gold fell $5.40.

On the currency front, the U.S. dollar is trading at 110.08 yen compared to the 110.19 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.1173 compared to yesterday's $1.1155.   Asia   Asian stocks ended a choppy session mostly higher, as an increase in oil prices and positive cues from overseas markets outweighed concerns about a slowdown in Chinese growth and the prospects of higher interest rates in the U.S.   The yen saw a sudden spike on the eve of G7 summit talks, with leaders of the world's seven major industrial democracies expected to promote monetary, fiscal and structural policies to spur growth in their communiqué when the summit ends on Friday.   Japanese shares ended flat as an early rally fizzled out amid the yen's strength. The Nikkei 225 Index closed up 15.11 points or 0.09 percent at 16,773 after climbing more than 1 percent in early trading.     Australian shares ended a choppy session modestly higher as gains in the mining sector offset weakness among consumer staples stocks. The All Ordinaries Index gained 15.10 points or 0.28 percent to finish at 5,452.    China's benchmark Shanghai Composite Index rose 0.26 percent to end above the key 2,800 level, with energy shares leading the rebound. Hong Kong's Hang Seng index inched up 29.06 points or 0.14 percent to finish at 20,397.11.    Investors shrugged off sluggish capex data, which showed that Australian business investment fell by 5.2 percent in the March quarter, much worse than forecasts for a 3.5 percent decline. Investment climbed 0.8 percent in the previous three months. 

Europe

After seeing choppiness in early trading, European stocks were modestly higher in the morning session, as higher oil prices boosted the commodity space.  Since the afternoon, the averages have turned mixed, with the DAX and CAC 40 Index moving moderately higher but the FTSE 100 is lower.   On a relatively light day on the economic front, official data showed that the U.K. economy expanded as initially estimated in the first quarter, as GDP grew 0.4 percent. On an annual basis, GDP climbed 2 percent instead of the 2.1 percent estimated previously.     U.S. Economic Reports   Partly reflecting a jump in orders for commercial aircraft and parts, the Commerce Department released a report showing that new orders for U.S. manufactured goods surged up by much more than expected in April. The Commerce Department said durable goods orders shot up by 3.4 percent in April after climbing by an upwardly revised 1.9 percent in March. 

Economists had expected orders to rise by just 0.3 percent compared to the 0.8 percent increase that had been reported for the previous month. Excluding orders for transportation equipment, durable goods orders rose by a much more modest 0.4 percent in April after inching up by 0.1 percent in March. The increase matched economist estimates.   First-time claims for U.S. unemployment benefits decreased for the second straight week in the week ended May 21st, according to a report released by the Labor Department.

The report said initial jobless claims fell to 268,000, a decrease of 10,000 from the previous week's unrevised level of 278,000. Economists had expected claims to edge down to 275,000.     The National Association of Realtors will release its pending home sales index for April at 10 am ET. Economists expect pending home sales to have increased by 0.8 percent month-over-month in April.    In March, the index rose 1.4 percent following a 3.4 percent increase in the previous month. Annually, the index was also up 1.4 percent. Pending home sales rose strongly in the Midwest.    The Kansas City Federal Reserve is due to release its regional manufacturing index for May at 11 am ET. In April, the index was at -4.    Federal Reserve Governor Jerome Powell will speak on the economy and monetary policy in Washington at 12:15 pm ET.     The Treasury Department is scheduled to announce the results of its auction of $28 billion worth of seven-year notes at 1 pm ET.    Stocks in Focus

HP Inc. (HPQ) reported better than expected second quarter non-GAAP earnings, helped by cost cuts, while its revenues fell year-over-year. The company's third quarter and full year guidance was lackluster.    PVH (PVH) reported better than expected first quarter non-GAAP earnings and higher revenues. The company also raised its full year non-GAAP earnings per share guidance.    Williams-Sonoma (WSM) reported better than expected first quarter non-GAAP earnings per share and its revenues rose year. The company's full year guidance was in line.    Guess (GES) reported a wider than expected loss for its first quarter and its revenues declined 6 percent. The company's second quarter guidance was weak.    Costco (COST) reported better than expected third quarter earnings, while its sales missed estimates.    Sanofi (SNY) announced that a FDA Committee has recommended approval of the NSA for its fixed-ratio combination of basal insulin glargine 100 units/ml and GLP-1 receptor against lixisenatide for the treatment of adults with type 2 diabetes.    TD Ameritrade (AMTD) announced that its CEO Fred Tomczyk intends to sell up to 100,000 shares of the company's common stock, representing less than 5 percent of his total holding. Donaldson (DCI) announced a 2.9 percent increase in its quarterly dividend.