By RTT News, October 03, 2013, 06:28:00 AM EDT
(RTTNews.com) - The sentiment on Wall Street continues to reflect concerns about the unresolved U.S. budgetary deadlock. The major U.S. index futures are pointing to a modestly lower opening on Thursday. Earlier in the global trading day, Asian stocks closed mostly higher amid positive Chinese non-manufacturing data, while the European markets are exercising caution. The standoff among lawmakers continues, as they are unable to strike the right chord to clinch a deal. The lack of consensus has put the prospects of raising the U.S. debt ceiling within the stipulated deadline into jeopardy and has conjured up visions of a default by the world's largest economy. Traders may also react to the results of the Institute for Supply Management's non-manufacturing survey.
At 6:15 am ET, the Dow futures are slipping by 40 points, the S&P 500 futures are moving down 5.40 points and the Nasdaq 100 futures are declining 5.75 points.
U.S. stocks retreated on Wednesday amid anxiety about the government shutdown, which entered its second day.
On the economic front, the Institute for Supply Management will release the results of its non-manufacturing sector for September at 10 am ET. Economists expect the headline non-manufacturing index to slip to 57 in the month.
San Francisco Federal Reserve Bank President John Williams is scheduled to speak in San Diego at 10:30 am ET. Dallas Federal Reserve Bank President Richard Fisher will participate in a discussion with John Taylor on the effect of uncertainty on growth in Dallas at 12:30 Pm ET. Federal Reserve Governor Jerome Powell is due to speak to the St. Louis Fed's Community Banking Research Conference at 12:45 pm ET. Fisher will speak again on the economy in Little Rock, Arkansas at 3:30 pm ET.
In corporate news, Texas Industries ( TXI ) reported first quarter net income of 1 cents per share compared to a loss of 8 cents per share last year. Net sales rose to $233.08 million from $175.52 million in the year-ago period. The earnings were in line, while the revenues slightly shy of estimates.
Applied Micro Circuits ( AMCC ) announced the appointment of Douglas Ahrens as its CFO, effective October 17th, 2013. Sterling Financial (STSA) said that it has completed its acquisition of Commerce National Bank for $42.9 million. Forest Labs ( FRX ) announced that the company and Royalty Pharma have jointly filed an additional lawsuit in a U.S. district court against First Time US Generics for infringement of certain patents related to Forest's SAVELLA product.
Most Asian markets advanced, encouraged by data on Chinese manufacturing sector. In the process, the markets ignored the negative lead from Wall Street overnight and the impact a protracted shutdown can have on the U.S. economy. Meanwhile, the Japanese and Singaporean markets ended modestly lower and the Chinese and South Korean markets were closed for public holidays.
Australia's All Ordinaries closed up 17.10 points or 0.33 percent at 5,232. Most sectors advanced, with the exception of industrial and energy stocks. Hong Kong's Hang Seng Index closed at 23,214, up 229.92 points or 1 percent. Meanwhile, Japan's Nikkei 225 average showed volatility throughout the session and remained mostly below the unchanged line before closing down 13.24 points or 0.09 percent at 14,157.
Tokyo Electric Power fell close to 5 percent and led the decliners among the index components after reports of leakage of radioactive water out of its Fukushima plant. Resource, real estate, retail and export stocks also came under selling pressure. On the other hand, financial and utility stocks advanced.
On the economic front, the results of a survey by the China Federation of Logistics and Purchasing, or CFLP, and the National Bureau of Statistics revealed that their index measuring performance of the non-manufacturing sector, which includes services and construction industries, rose to a six-month high of 55.4 in September from 53.9 in August.
After opening higher, European stocks have turned mixed. The French market and the German market have pared back their gains and dropped below the changed line. At the same, the U.K. market has opened higher and is seen moving roughly sideways.
In corporate news, Ryanair was fined 8 million euros for violating French labor laws by employing Marseille-based crew under Irish contracts. Separately, Ryanair said that the traffic for the month of September rose 3 percent from the year-ago period. EasyJet reported that the number of passengers it carried in September rose 4.8 percent and load factor improved 1.2 percentage points to 89.7 percent. The company raised the low end of its pre-tax profit forecast for the fiscal year ended September 2013 to 470 million pounds from 450 million pounds, while maintaining the high end at 480 million pounds. BP (BP) noted that a U.S. federal appeals court ruled in its favor regarding payment of inflated claims related to the 2010 Gulf of Mexico oil spill case.
On the economic front, final estimates released by Markit Economics showed that the euro area private sector activity expanded at a slightly faster pace than had been estimated initially. The composite purchasing managers' index rose to 52.2 in September from 51.5 in August, coming in higher than the flash estimate of 52.1. The service sector purchasing managers' index rose 1.5 points to 52.2, an upward revision from the flash estimate of 52.1.
The results of a survey conducted jointly by Markit Economics and the CIPS showed that the U.K. service sector activity grew at a slower pace in September. The purchasing managers' index edged down 0.2 points to 60.5. A report released by Lloyds' Halifax division showed that U.K. house prices rose 0.3 percent month-over-month September, the same pace of increase as in August. Eurostat reported that retail sales in the euro area rose a better than expected 0.7 percent month-over-month in August.
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