Wall Street Turns Defensive After Eurozone GDP Disappoints

(RTTNews) - Wall Street has chosen to tread cautiously on Thursday after advancing solidly on Wednesday despite the release of soft retail sales data. The mood has turned somber as a report showed that eurozone GDP stagnated, as Germany contracted more than expected and the French economy stagnated unexpectedly. These sore data points could serve to keep sentiment subdued even as the markets look ahead to a slew of retail earnings reports and the jobless claims data.

At 6:15 am ET, the Dow futures are slipping 9 points, the S&P 500 futures are easing 0.50 points and the Nasdaq 100 futures are moving down 0.75 points.

U.S. stocks rebounded on Wednesday, when things turned quiet on the geopolitical front and soft data triggered expectations that central banks will not act in haste while normalizing rates.

On the economic front, the Labor Department is due to release its jobless claims report for the week ended August 9 at 8:30 am ET. Economists expect claims to have risen to 295,000 from 289,000 in the previous week.

Around the same time, the Labor Department will also release its report on export and import prices for July. The consensus estimates call for a 0.2 percent month-over-month drop in export prices and a 0.2 percent decline in import prices. The Treasury is due to announce the results of its auction of 30-year bonds at 1 pm ET.

In corporate news, Cisco (CSCO) reported fourth quarter earnings and revenues that topped expectations. The company also said in a call with analysts that it is planning to eliminate 6,000 positions starting with the first quarter and issued lukewarm guidance for the first quarter.

NetApp (NTAP) reported better than expected first quarter results and issued in line guidance for its second quarter.

Weyerhaeuser (WY) announced a 32 percent increase in its quarterly dividend to 22 cents per share. The company also announced a new authorization to buy back $700 million worth of shares. O'Reilly's (ORLY) board approved the buyback of an additional $500 million worth of shares.

Netease.com.com (NTES) reported second quarter earnings per ADS and revenues that exceeded estimates.

Agilent (A), Applied Materials (AMAT), Dillard's (DDS), Extreme Networks (EXTR), J.C. Penney (JCP), Nordstrom (JWN) and SINA (SINA) are among the companies due to release their quarterly results after the close of trading.

The major Asian markets closed mixed despite the positive lead from Wall Street overnight. The Chinese, Hong Kong and Taiwanese markets moved to the downside, while most other major markets in the region advanced.

The Japanese market continued to be a beneficiary of a weaker yen, as the Japanese unit retreated in reaction to weak Japanese machinery orders data. The Nikkei 225 average opened higher and moved roughly sideways in the morning before legging up in the afternoon and moved sideways yet again. The index closed 100.94 points or 0.66 percent higher at 15,315. A majority of stocks advanced, led by exporters, but real estate stocks moved to the downside.

Australia's All ordinaries also hovered in positive territory throughout the session before closing up 35 points or 0.64 percent at 5,543. Telecom, IT, healthcare and consumer discretionary stocks advanced strongly, while material stocks came under selling pressure.

Hong Kong's Hang Seng Index closed at 24,801, down 88.98 points or 0.36 percent, and China's Shanghai Composite ended down 16.41 points or 0.74 percent at 2,207.

On the economic front, Japan's Cabinet Office reported that core machinery orders rose 8.8 percent month-over-month in June, less than the expected 15.3 percent increase. On a yearly basis, core machinery orders fell 3 percent, belying expectations for a 3 percent increase.

European stocks opened lower but have since then turned mixed, with the German and French markets languishing in the red in reaction to weak GDP data, while the U.K. market has recovered and is currently higher. The mixed sentiment has come despite mostly positive earnings news released from the region.

In corporate news, Thyssenkrupp reversed to a profit in its third quarter and raised its earnings forecast for the year slightly. K+S reported better than expected second quarter profits. Tour operator TUI's third quarter earnings rose sharply and exceeded estimates. Dutch insurer Aegon also reported better than expected second quarter earnings. Meanwhile, German utility RWE reported a sharp decline in its first half profits that trailed estimates.

On the economic front, dragged down by weak exports and capital formation, the German economy contracted 0.2 percent sequentially in the second quarter, preliminary GDP data released by the German Federal Statistical Office showed. The contraction was steeper than the 0.1 percent drop estimated by economists. French statistical office INSEE reported that the French economy stagnated in the second quarter, belying expectations for 0.1 percent GDP growth.

The euro area growth slowed to 0.7 percent in the second quarter from 0.9 percent in the first quarter, matching economists' expectations. Eurozone inflation eased to 0.4 percent in July from 0.5 percent in June, in line with flash estimate, final figures from Eurostat showed.

A report released by the Royal Institute for Chartered Surveyors showed that the average asking price of a house in the U.K. fell to a 5-month low in July.