In the Headlines
Early Thursday, U.S. indices were attempting to build on yesterday's gains, with the NYSE and Nasdaq futures headed higher. Bulls will be hoping to make it the fourth day in a row of upside action.
European stocks were trading in positive territory before Wall Street's open. German Chancellor Angela Merkel and French President Nicolas Sarkozy yesterday affirmed their confidence that Greece would remain in the eurozone. Their statement of support sent U.S. stocks higher in Wednesday's session, and European traders took up the baton this morning. Indices in the region showed significant gains early Thursday. European banks were among the biggest percentage gainers on the renewed optimism.
The sector was not hurt by news from Swiss bank UBS (UBS) that an employee from its equities trading unit was arrested in London on charges of "fraud by abuse of position." The company estimates that damages from his fraudulent trades total $2 billion, which could result in a third-quarter loss for the UBS. The bank's U.S.-traded shares plunged $1.23, or 9.7%, to $11.45 in the premarket.
Asian stocks ended higher Thursday on optimism about German and French support for Greece. Japan's exporters, sensitive to the euro currency trade, posted big gains Thursday.
Economic Docket
It's a busiest day of the week for U.S. economic data. At 8:30 a.m. EDT, the Labor Department will release its weekly numbers on jobless claims. As usual, economists and investors are watching the 400,000 level for new claims, with a number significantly above or below that having the potential to move the market.
Half an hour later the Labor Department is back with the Consumer Price Index for August. These data are expected to show a gain of 0.2% in the cost of living for the month. That would be a slower pace than in July. The core number, which takes out food and energy prices, is also expected to show an increase of 0.2%.
Also at 8:30 this morning, we will get the Federal Reserve's Empire State manufacturing index for September, which shows industrial activity in the New York region. The number showed an unexpected decline last month, but analysts are expecting that to reverse higher this time around.
At 9:15, the Fed will put out its report on industrial production and capacity utilization for August. Economists expect both metrics to remain essentially flat from July.
If you want still more Fed data, it's your lucky day. At 10 a.m., the Philly Fed is set to release its manufacturing index for September. As with the New York data, these are expected to show a bounce back from dismal results last month.
Commodities Corner
Turning to commodities, oil rose $0.38 per barrel ahead of Wall Street's open, to $88.29. Gold fell $19.30 per ounce to $1,807.20.
Earnings on Tap
In earnings news, Pier 1 Imports (PIR) reported second-quarter income of $0.14 per share, in line with views. Sales were $339.60 million, topping estimates of $335.30 million. The company said margins on merchandise sales rose on a year-over-year basis. Pier 1 shares rose $0.69, 5.91%, to $12.36.
After the close, Diamond Foods (DMND) is scheduled to post its fourth-quarter report. The company, whose brand portfolio includes Emerald, Pop Secret and Kettle snacks, is expected to report income of $0.44 a share on sales of $216.34 million. The stock has a decent track record of profit and sales growth in recent quarters. Analysts expect double-digit earnings growth in the next two years. Its chart is sporting a potentially bullish price consolidation above its 10-week moving average.
An eagerly anticipated report comes from BlackBerry and tablet maker Research In Motion (RIMM) after the bell. Revenue growth has been slipping in recent quarters, as wireless gear from Apple (AAPL) and manufacturers using Google's (GOOG) Android system grabbed market share from RIM. In its second quarter, RIM is expected to earn $0.89 a share on revenue of $4.47 billion. Those would mark declines from the year-ago quarter.
Early Movers
S&P 500 price movers early Thursday included Netflix (NFLX), which has been battered by bad news lately. There was another downbeat development this morning, as the company said its recent price hike will result in more customer defections than originally expected. The shares fell $22.71 in early trading, or 10.88%, to $186.
An upside mover was chip gear maker Applied Materials (AMAT), advancing $0.255, 2.27%, to $11.50 following an Oppenheimer upgrade to Outperform from Perform. Oppenheimer's analyst said the overall chip sector appears to have bottomed.
Analyst Actions
Argus initiated coverage on recent IPO LinkedIn (LNKD) with a rating of Hold. The social networking company went public in May at $45; the shares closed Wednesday at $87.55.
