U.S. Stocks May Open Higher On News Of Brexit Deal
(RTTNews) - After ending the previous session modestly lower, stocks may move back to the upside in early trading on Thursday. The major index futures are currently pointing to a higher open for the markets, with the Dow futures up by 75 points.
Early buying interest may be generated in reaction to news that the U.K. and EU negotiators have reached a last-minute Brexit deal.
European Commission President Jean-Claude Juncker described the deal as "fair and balanced" for the EU and the U.K. and urged member nations to back the agreement.
The deal could eliminate some of the Brexit uncertainty hanging over the global markets, although it remains to be seen if the agreement will be approved by U.K. lawmakers.
A positive reaction to the latest batch of earnings news may also contribute to some early strength on Wall Street.
Shares of Netflix (NFLX) are moving sharply higher in pre-market trading after the video streaming giant reported third quarter results that exceeded analyst estimates on both the top and bottom lines.
Financial giant Morgan Stanley (MS) may also see initial strength after reporting better than expected third quarter results.
On the other hand, shares of IBM Corp. (IBM) may come under pressure after the tech giant reported third quarter earnings just above analyst estimates but on weaker than expected revenues.
Traders are also digesting a slew of U.S. economic news, including a report from the Commerce Department showing a sharp pullback in housing starts in the month of September.
The Commerce Department said housing starts plunged by 9.4 percent to an annual rate of 1.256 million in September after soaring by 15.1 percent to a revised 1.386 million in August.
Economists had expected housing starts to drop by 3.2 percent to an annual rate of 1.320 million from the 1.364 million originally reported for the previous month.
The report said building permits also slumped by 2.7 percent to an annual rate of 1.387 million in September after jumping by 8.2 percent to a revised 1.425 million in August.
Building permits, an indicator of future housing demand, had been expected to tumble by 4.9 percent to a rate of 1.350 million from the 1.419 million originally reported for the previous month.
A separate report from the Labor Department showed a modest increase in first-time claims for U.S. unemployment benefits in the week ended October 12th.
The Labor Department said initial jobless claims edged up to 214,000, an increase of 4,000 from the previous week's unrevised level of 210,000. Economists had expected jobless claims to inch up to 215,000.
Just before the start of trading, the Federal Reserve is due to release its report on industrial production in the month of September. Industrial production is expected to edge down by 0.1 percent.
Following the rally seen on Tuesday, stocks showed a lack of direction over the course of the trading day on Wednesday. The major averages spent the day bouncing back and forth across the unchanged line.
Eventually, the major averages finished the day modestly lower. The Dow edged down 22.82 points or 0.1 percent to 27,001.98, the Nasdaq dipped 24.52 points or 0.3 percent to 8,124.18 and the S&P 500 slipped 5.99 points or 0.2 percent to 2,989.69.
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Thursday. Japan's Nikkei 225 Index and China's Shanghai Composite Index both edged down by 0.1 percent, while Australia's S&P/ASX 200 Index slid by 0.8 percent.
Meanwhile, European stocks have moved mostly higher on the day, with the U.K.'s FTSE 100 Index climbing by 0.9 percent. The German DAX Index has also risen by 0.3 percent, although the French CAC 40 Index has edged down by 0.1 percent.
In commodities trading, crude oil futures are slipping $0.23 to $53.13 a barrel after rising $0.55 to $53.36 a barrel on Wednesday. Meanwhile, after climbing $10.50 to $1,494 an ounce in the previous session, gold futures are dipping $1.20 to $1,492.80 an ounce.
On the currency front, the U.S. dollar is trading at 108.73 yen compared to the 108.76 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.1112 compared to yesterday's $1.1072.