US stocks set for third day of gains as China delivers some cheer
New York (Oct 1) US stocks were poised for another day with solid gains on Thursday, with futures tracking Asian and European shares higher after Chinese manufacturing data beat forecasts.
Investors were also waiting for factory data from the U.S. and weekly jobless claims for clues to the strength of the world’s largest economy.
Futures for the Dow Jones Industrial Average YMZ5, +0.31% jumped 132 points, or 0.8%, to 16,304, while those for the S&P 500 index ESZ5, +0.26% added 15.30 points, or 0.8%, to 1,924. Futures for the Nasdaq 100 index NQZ5, +0.45% climbed 47.50 points, or 1.2%, to 4,211.
The indicated increases would mark a third straight day of gains for the S&P 500 index SPX, +1.91% and Dow average DJIA, +1.47% and a second day of gains for the Nasdaq Composite COMP, +2.28% after all three benchmarks closed out Wednesday firmly in positive territory. However, the advances that session weren’t enough to swing the averages higher for the quarter, and they ended with the sharpest quarterly losses in four years.
The rises Wednesday came after an ADP private-sector jobs report came in stronger than forecast. Investors eagerly are awaiting the nonfarm-payrolls report on Friday, which is closely watched by the Federal Reserve in determining the best time for a rate hike.
Thursday’s early upbeat trading mood followed a better-than-expected reading on Chinese factory activity, although analysts cautioned that the country’s economy is still likely to have slowed substantially in 2015. The official manufacturing purchasing managers’ index ticked up to 49.8 in September from 49.7 in August, better than expected, but below the 50 mark that separates contraction and expansion.
“Economic growth in emerging economies has weakened substantially this year, and China may well see its growth slow to 6.8% this year from 7.3%, and the PMI data tends to confirm this,” said Brenda Kelly, head analyst at London Capital Group, in a note.
“Beijing is changing tack and trying to wean itself off its dependence on exports-led investment growth towards domestic consumption, so it’s little wonder its manufacturing and industrial production is slowing,” she said.
Data: Weekly jobless claims are slated for release at 8:30 a.m. Eastern Time and are forecast to show that 270,000 Americans filed for unemployment benefits last week.
Later, investors get U.S. manufacturing data for September, due at 9:45 a.m. Eastern, and the ISM reading, due at 10 a.m. Eastern. For the latter, economists polled by MarketWatch expect a pullback to 50.6% in September, from 51.1% in August.
Construction spending for August comes out at 10 a.m. Eastern, while September auto sales numbers will be released throughout the day.
On the Fed speaker docket, San Francisco Federal Reserve President John Williams will give a speech on the economic outlook to Salt Lake Area Community Leaders at 2:30 p.m. Eastern. Williams is a voting member of the Fed’s policy-setting committee this year.
Movers & shakers: Shares of Deere & Co. DE, +0.52% could be active on Thursday after the tractor maker said it has reached a tentative agreement with the United Auto Workers Union on a six-year contract to replace a pact that expired Thursday.
Wal-Mart Stores Inc. WMT, +1.66% may also move after news it is preparing a round of layoffs as early as Friday that would affect hundreds of employees at its Bentonville, Ark., headquarters.
Google Inc. GOOGL, +2.53% GOOG, +2.26% and Microsoft Corp. MSFT, +1.89% each rose 1% premarket after the software rivals agreed to dismiss patent-related lawsuits between the two companies.
Target Corp. TGT, +0.87% said it will expand its price-matching policy and match prices of 29 of its rivals, according to media reports.
Ahead of the bell, McCormick & Co. Inc. MKC, +1.22% is forecast to report third-quarter earnings of 87 cents a share, according to FactSet estimates.
Other markets: Asian markets ended higher, but with China and Hong Kong closed for a national holiday.
Source: MarketWatch
