A day after stocks experienced a huge rally, they experienced a huge selloff and today, it seems, that the markets may start on a positive note, recovering somewhat from Wednesday's drop with buyers coming back in. U.S. stock futures are mildly higher after Nike reported surprising strong earnings Wednesday after the close, with sales boosted by the the weak dollar. Meanwhile, the dollar strengthened while commodity prices mostly declining.After the Dow industrials rallied over 420 points Tuesday when the Federal Reserve cut rate by 75 basis points, it nearly gave it all back Wednesday when it dropped 293 points or 2.36%. As oil and gold prices declined seeing the worst one-day dollar decline in 17 years and 28 years respectively, oil producers and miners were lower, dragging down markets. The S&P 500 fell 32 points, or 2.43%, and the Nasdaq composite closed down 58 points, or 2.53%.
Few economic indicators are due out today:
At 8:30 a.m., weekly initial jobless claims will be reported to give an indication of the labor markets.
At 10:00 a.m., February leading indicator and March Philadelphia Fed index will be released. Both are expected to decline, showing an overall economic slowdown as well as a specific regional one (manufacturing activity in the Philadelphia area).
Overseas, Asian markets were mixed. While Japan's markets were closed, Hong Kong's Hang Seng Index fell 3.5% and Australia's S&P/ASX 200 index fell 3.1% due to commodity stocks mostly. Meanwhile, the Shanghai Composite Index closed 1.1% higher after having plunged 6.5% as airlines and financials soared due to bargain hunting.
In Europe, stocks dropped, with miners again dragging markets. However, commodities weren't the only culprits and a warning from Credit Suisse that it will report a loss for this quarter didn't help sentiment. Credit Suisse fell as much as 11% in Swiss trading after the bank said "it will take $2.65 billion of writedowns spread over the fourth quarter and first three months of 2008."
Commodity prices continued to decline Thursday, with gold futures down over $34 to $911 an ounce. Oil futures fell below $100 a barrel. At the same time, the dollar strengthened somewhat, going back over the 100 yen level and rising against the euro and the British pound.
Several companies are in focus this morning including Nike, FedEx, Citigroup and Borders.
Nike Inc. (NYSE: NKE) shares rose nearly 4% in after-hours trading following its strong earnings report. Nike said on Wednesday net profit increased to $463.8 million, or 92 cents a share, from $350.8 million, or 68 cents a share, a year earlier, while total sales jumped 16%, to $4.5 billion, as strong international sales of shoes and clothing were buoyed by a weak dollar.
Borders Group Inc. (NYSE: BGP) said it is launching a review to consider the possible sale of part or all of the company. The bookseller delayed the scheduled Wednesday release of its fourth-quarter earnings. BGP shares were up over 67% in premarket trading.
Citigroup Inc. (NYSE: C) announced it plans to cut more than 5% of staff in the securities unit to rein back expenses after U.S. subprime- mortgage related losses.Several companies are in focus this morning including Nike, FedEx, Citigroup and Borders.
Nike Inc. (NYSE: NKE) shares rose nearly 4% in after-hours trading following its strong earnings report. Nike said on Wednesday net profit increased to $463.8 million, or 92 cents a share, from $350.8 million, or 68 cents a share, a year earlier, while total sales jumped 16%, to $4.5 billion, as strong international sales of shoes and clothing were buoyed by a weak dollar.
Borders Group Inc. (NYSE: BGP) said it is launching a review to consider the possible sale of part or all of the company. The bookseller delayed the scheduled Wednesday release of its fourth-quarter earnings. BGP shares were up over 67% in premarket trading.
FedEx (NYSE: FDX) is scheduled to report earnings this morning. Analysts on average, predict profit of $1.23 per share, lower than a year ago, due to weakening economic conditions.
Why do we have a weak dollar?
Holiday hiring slow for retailers
Closing Bell: What sell-off? (AIG, ABK, EPR, MBI, JAVA, ORCL, ERTS)
