The Day Ahead: Anticipating Economic Data

 | Jan 05, 2012 | 8:30 AM EST
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In the Headlines

Equity futures showed losses Thursday, following Wall Street's rally off lows in Wednesday's session. The downside trade preceded a raft of economic data due out today in the U.S.

Once again, European headlines worried traders. Decliners outpaced advancers by a wide margin in European trade. Italian bank UniCredit led the financial sector down, falling further after yesterday's steep discounts on new shares.

Adding to the selling pressure on the sector was a comment from Spain's economic minister that his nation's banks would need as much as $65 billion to cover bad assets.

The euro sank to a new one-year low vs. the dollar.

Most Asian indices fell, dragged down by the already beleaguered Shanghai Composite, which finished 0.96% lower, its worst levels in nearly three years. Hong Kong's Hang Seng managed a gain of 0.46%, spurred by upside trade in resources and some financials.

Economic Docket

There are some eagerly anticipated economic reports on the schedule for Thursday. ADP is set to release its unemployment data at 8:15 a.m. EST. Analysts expect private-sector employers to have added 175,000 jobs in December, lower than November's 206,000.

Fifteen minutes later, the Labor Department is scheduled to weigh in with its weekly jobless claims numbers. Economists are eyeing 375,000 new claims, down slightly from 381,000 the previous week.

The Institute for Supply Management is planning to release its December services sector index at 10 a.m. Expectations are for it to rise to 53 from November's reading of 52.

Commodities Corner

Oil remained above the $100 threshold, with buying spurred by worries about an Iranian supply disruption. However, the per-barrel price fell $0.60 in early Nymex trade, to $102.62 per barrel.

In metals trade, gold shed $2.70 per ounce, to $1,610 before Wall Street's open.

Retail in the Spotlight

The retail sector will be in the spotlight today, as chain stores report December same-store sales. The high end and the low end – in the form of luxury and discount retailers – are forecast to show big gains.

Late Wednesday, teen clothing retailer Zumiez (ZUMZ) reported a 10% increase in comp sales, nearly double analysts' views. Shares bolted $2.84, 10.79%, to $29.17 in the premarket.

Costco (COST), which typically is among the early reporters, said December same-store sales rose 7%, slightly below views. The stock slipped $0.08 in early trade, down 0.10%, to $83.99.

Earnings News

Before the bell, Monsanto (MON) is expected to report first-quarter earnings of $0.16 per share on revenue of $2.05 billion. Shares have been consolidating below October's 52-week high of $78.71, finding support above key moving averages.

Family Dollar Stores (FDO) reports its first quarter after the close, with analysts pegging income at $0.68 a share and sales at $2.17 billion. Those would mark year-over-year increases.

Early Movers

Among companies in the news, DJIA component Kraft Foods (KFT)has struck a deal to distribute its Crystal Light and Country Time drinks through SodaStream (SODA).

Kraft rose $0.19 in early trade, or 0.51%, to $37.58. SodaStream, a small cap that went public in November, 2010, vaulted $2.25, 5.96%, to $40 in the premarket.

Another big gainer ahead of the bell was hard-drive maker Seagate Technology (STX), which shipped more hard drives than expected last month. The company also raised its revenue outlook for the current quarter. The shares were up $1.20, OR 7.13%, to $18.02 in early trade.

Analyst Actions

A couple of European pharmaceuticals were downgraded at JP Morgan. Sanofi (SNY) was demoted to Neutral from Overweight, and AstraZeneca (AZN) was bumped down to Underweight from Neutral. In early trading, Sanofi skidded $0.89, or 2.44%, to $35.61, while AstraZeneca slipped $0.48, or 0.99%, to $47.

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