Sentiment Muted Amid Mixed Catalysts

(RTTNews) - The major U.S. index futures are pointing to a lower opening on Thursday, with sentiment remaining fragile as traders look past the FOMC announcement. With economic data continuing to remain soft and earnings report coming in mixed, sentiment is likely to remain muted. Among the economic reports, the Labor Department reported that jobless claims fell by less than expected. With the Fed remaining tightlipped about the economic impact of the government shutdown, the data in the coming days is likely to shed some clarity on it.

U.S. stocks ended Wednesday's session lower despite the Fed's assurance of a stimulatory environment. The major averages opened slightly higher, as traders digested soft private payrolls data and apprehensions concerning the Fed decision. After nervously moving around the unchanged line until the mid-session, the averages dipped into negative territory and began trading sideways until the Fed announcement.

Further selling emerged after the FOMC announcement, with the averages declining sharply only to recoup some of their losses going into the close.

The Dow Industrials ended down 61.59 points or 0.39 percent at 15,619, the S&P 500 Index closed 8.64 points or 0.49 percent lower at 1,763 and the Nasdaq Composite Index closed at 3,931, down 21.72 points or 0.55 percent.

Twenty-five of the thirty Dow components closed lower, while the remaining five stocks advanced. Verizon (VZ), Procter & Gamble (PG), Pfizer (PFE), IBM (IBM) and Chevron (CVX) were among the biggest losers of the session.

Biotechnology and housing stocks came under selling pressure, while gold stocks advanced notably.

On the economic front, the Fed said in its post meeting policy statement that it would continue with its quantitative easing program and also maintained the Fed rates unchanged at 0-0.25 percent. The growth commentary was unchanged, with the central bank seeing the economy continuing to expand at a moderate pace. While the commentary on the labor market, household spending and fixed investment was left unchanged, the housing market was observed as slowing down compared to the Fed's September assessment of strengthening recovery.

The assessment of inflation was also left unaltered. However, the Fed dropped the cautionary statement that was part of the September statement, which suggested that the central bank sees a potential slowdown in economic and labor market recovery if the tighter financial conditions observed in recent months are sustained. Just as in the September meeting, Kansas City Federal Reserve Bank President Esther George voted against the action, premising her hawkish stance on fears of future economic and financial imbalances.

ADP's survey showed that the private sector created 130,000 jobs in October, fewer than the 150,000 job gains expected by economists. Of the 130,000 jobs created, 107,000 jobs were added by the service sector, while 24,000 came from the goods producing sector.

Consumer prices rose 0.2 percent month-over-month in September, in line with expectations. Core consumer prices were up 0.1 percent, tamer than the 0.2 percent growth expected by economists. Energy prices were up 0.8 percent, while food prices remained unchanged. Owners' equivalent rent accounting for 24 percent of the CPI was up 0.2 percent. Annually, consumer and core consumer prices were up 1.7 percent and 1.2 percent, respectively.

While anticipation of a status quo FOMC decision lifted the Dow Industrials to a record intraday high in early trading, the index pulled back as the day progressed. The market focus is now likely to shift to economic data, given the overhanging fiscal risks. If concerns persist, we could see further selling, and in that case, the Dow Industrials could find support around the 15,570, 15,537 and 15,497 levels. On the upside, the index has resistance around 15,636, 15,673 and 15,726.

Crude, Commodity Markets

Crude oil futures are slipping $0.49 to $96.23 a barrel after declining $1.43 to $96.77 a barrel on Wednesday. The previous session's retreat came amid a pick up in risk aversion and the release of the petroleum status report.

The report showed that crude oil stockpiles climbed by 4.1 million barrels to 383.9 million barrels in the week ended October 25th. Inventories remained above the upper limit of the average range for this time of the year.

Meanwhile, gasoline stockpiles declined by 1.7 million barrels yet were near the upper half of the average range. Distillate inventories fell by 3.1 million barrels and were near the lower limit of the average range.

Refinery capacity utilization averaged 86.3 percent over the four weeks ended October 25th compared to 86.8 percent over the four weeks ended October 18th.

Gold futures, which rose $3.80 to $1,349.30 an ounce in the previous session, are currently slipping $21.40 to $1,327.90 an ounce.

Among currencies, the U.S. dollar is trading at 98.25 yen compared to the 98.51 yen it fetched at the close of New York trading on Wednesday. The dollar is currently valued at $1.3649 compared to yesterday's $1.3736.

Asia

Most Asian markets declined, unimpressed by the Fed statement. The Japanese, South Korean and Indonesian markets led the retreat.

The Japanese markets took a hit from a stronger yen, which firmed up in reaction to the central bank decisions from the U.S. and Japan. The Federal Reserve disappointed by not expressing concerns about the domestic fiscal risks, while its Japanese counterpart did further damage to risk appetite by maintaining a status quo stance.

The Nikkei 225 average languished below the unchanged line throughout the session, with the selling pressure intensifying in late trading following the release of the Bank of Japan's monetary policy statement. The index ended down 174.41 points or 1.20 percent at 14,328. A majority of stocks declined, led by exporters.

After opening lower and trimming its losses in early afternoon trading, Australia's All Ordinaries moved nervously around the unchanged line before closing 5.10 points or 0.09 percent lower at 5,420. Financial stocks declined sharply, offsetting the modest optimism that was visible in most other sectors.

Hong Kong's Hang Seng Index closed at 23,206, down 97.65 points or 0.42 percent, and China's Shanghai Composite Index lost 18.85 points or 0.87 percent before closing at 2,142.

On the economic front, the Bank of Japan held its uncollateralized overnight call rate and its quantitative easing unchanged. At the same time, the central bank raised its 2014 GDP outlook for the domestic economy, now expecting 1.5 percent growth.

Earlier in the day, the Reserve Bank of New Zealand also maintained its monetary policy unchanged.

Europe

European stocks have opened lower and have since then turned mixed, as traders react to yesterday's Fed announcement, some lukewarm domestic economic data and mixed earnings. The Fre

In corporate news, Shell (RDS) reported lower profits for its third quarter, hurt by weak refining margins and lower production. The U.K.'s BG Group also reported a third quarter profit decline due to lower output in the U.S. Air France KLM reported a sharp decline in its third quarter profits.

Meanwhile, U.K. telecom company BT Group reported better than expected third quarter profits. French banking company BNP reported higher profits, benefiting from cost cuts. Beer maker AB InBev's third quarter earnings also rose year-over-year.

On the economic front, the results of a consumer confidence survey by GfK showed that German consumer confidence is set to wane in November. The forward looking consumer confidence index edged down 0.1 points to 7 in November, belying expectations for an improvement to 7.2.

A separate GfK survey for the U.K. showed that confidence among British consumers fell for the first time in 6 months in October, with the consumer confidence index slipping 1 point to -11.

Nationwide reported that U.K. house prices rose 1 percent month-over-month in October, better than the 0.7 percent rate expected by economists.

German retail sales fell unexpectedly in September, according to a report released by the German Federal Statistical Office. Retail sales slipped 0.4 percent month-over-month compared to expectations for 0.4 percent growth.

U.S. Economic Reports

While the Labor Department released a report showing a drop in first-time claims for U.S. unemployment benefits in the week ended October 26th, claims still came in slightly above economist estimates.

The report said initial jobless claims dipped to 340,000, a decrease of 10,000 from the previous week's unrevised figure of 350,000. Economists had expected jobless claims to fall to 335,000.

The results of MNI's manufacturing survey for the Chicago region are due at 9:45 am ET. Economists expect the business barometer to decline to 55 in October from 55.7 in September.

Stocks in Focus

Starbucks (SBUX) reported fourth quarter earnings of 63 cents per share on net revenues of $3.8 billion. The earnings beat expectations and the revenues were roughly in line. The company reaffirmed its 2014 revenue growth of 10 percent or greater and global comparable store sales growth in the mid single digits. Additionally, the company expects earnings of $2.55-$2.65 per share. The guidance was lukewarm.

Facebook (FB) reported third quarter adjusted earnings and revenues that exceeded estimates.

Crocs (CROX) reported third quarter non-GAAP earnings of 18 cents per share on revenues of $288.5 billion. The results missed estimates and the company's fourth quarter guidance was weak.

Marriott (MAR) reported better than expected third quarter results, while its fourth quarter guidance was weak.

Expedia (EXPE) reported third quarter adjusted earnings that exceeded estimates and revenues that climbed 17 percent and beat estimates.

Computer Sciences (CSC) reported better than expected second earnings per share from continuing operations, while its revenues were shy of estimates.

Exxon Mobil's (XOM) third quarter earnings declined from the year-ago period. Total revenues and other income were lower than in the year-ago quarter, but topped the consensus estimate.

Cardinal Health (CAH) reported first quarter profit that improved from the previous year period. Revenues for the quarter declined from the last year quarter, but topped the consensus estimate. The company raised its fiscal 2014 non-GAAP earnings from continuing operations per share outlook.

Among insurers, XL Group's (XL) third quarter operating earnings were in line, while its revenues were ahead of expectations. Lincoln National (LNC) and Hanover Insurance (THG) reported above-consensus operating earnings for their third quarter, while their revenues were slightly shy of estimates. At the same, Allstate (ALL) reported better than expected third quarter results.

Williams (WMB) reported better than expected third quarter adjusted earnings per share from continuing operations.

Standard & Poor's announced that A.O. Smith (AOS) will replace Saks (SKS) in the S&P MidCap 400 and FutureFuel (FF) will replace A.O. Smith in the S&P SmallCap 600 Index after the close of trading on November 4th.

Cooper Companies (COO) announced the appointment of Daniel McBride as its COO, effective November 1st, 2013. Apollo Group (APOG) announced the appointment of Mitchell Bowling as its COO, effective December 2nd, 2013.

Atmel (ATML) said its board has authorized an additional $300 million stock repurchase authorization.

Western Digital (WDC) announced an underwritten secondary public offering of 10.87 million shares of its common stock by Hitachi.

MDU Resources (MDU), Mohawk (MHK), Public Storage (PSA), Spansion (CODE), Tellabs (TLAB), Republic Services (RSG) and Newmont Mining (NEM) are among the companies due to release their quarterly results after the close of trading.