By Peter Nurse
Investing.com – U.S. stocks are seen opening higher Thursday, continuing the Fed-induced gains from the previous session ahead of the release of the latest employment and business sentiment data.
The major U.S. indices posted large gains Wednesday after the Federal Reserve delayed the start of the withdrawal of its monetary stimulus until nearer the end of the year, while keeping its interest rates unchanged.
The blue chip Dow Jones Industrial Average gained well over 300 points, or 1%, its best day since July 20. The broad-based S&P 500 also rose 1%, posting its best day since July 23, while the tech heavy Nasdaq Composite similarly finished the session 1% higher.
“The Covid-19 development is now the focal point for tapering,” said analysts at Nordea, in a note. “If the next job report is solid (300k-500k), it seems as if the Fed is ready to move, as they are close to admitting to “further substantial progress” on both goals.”
Helping the tone Thursday has also been a Bloomberg news report indicating that financial regulators in Beijing told embattled property developer China Evergrande Group (HK:3333) to avoid a near-term default on its dollar bonds.
Further indications of the health of the U.S. labor market will come later Thursday with the release of the weekly initial jobless claims data, which are forecast to fall to 320,000 from 332,000 the previous week.
Additionally, flash estimates for September manufacturing PMI and services PMI are due. The news from Europe was not promising, with the equivalent data suggesting a slowdown in the region’s recovery.
In corporate news, Pfizer (NYSE:PFE) is likely to be in the spotlight after the Food and Drug Administration approved booster shots of the drugmaker’s Covid-19 vaccine for people at a higher risk of infection.
Darden Restaurants (NYSE:DRI), the owner of Olive Garden and Longhorn Steakhouse, is expected to report first-quarter earnings before the market opens Thursday, while Nike (NYSE:NKE) and Costco Wholesale (NASDAQ:COST) will provide quarterly updates after the close.
Crude prices edged lower Thursday, handing back some of Wednesday’s gains on the back of another decline in U.S. oil stocks as production in the important Gulf of Mexico region remained hampered by the damage from two recent hurricanes.
Data released by the U.S. Energy Information Administration on Wednesday showed crude inventories fell by almost 3.5 million barrels last week, the seventh straight weekly decrease. The American Petroleum Institute’s numbers, released a day before, showed a draw of just over 6 million barrels.
Dow Futures Rise 150 Pts; PMIs, Initial Jobless Claims Due
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