Yesterday it was lower, today it is higher -- the China effect on U.S. stock futures. Stocks are set to open higher Thursday morning after stocks Shanghai markets rebounded 4.5%, prompting a bounce in markets worldwide. Of course, higher oil and commodity prices helped sentiment as well, but an unexpected loss at retail giant Sears tested investors' confidence early on. Several economic indicators, including employment data, will be in focus this morning.[Update: an unexpected rise in jobless claims, combined with Sears disappointment caused sentiment to sour somewhat. Stocks are headed for a flat to lower open.]
China shares bounced off a two-month closing low on Thursday after a sharp two-week selloff. The Shanghai Composite Index rose 4.5%. Investors reacted the People's Bank of China three-month bills auction as a sign of continued easy monetary policy. Encouraged by the happenings in China, world stock markets rose strongly Thursday.
Meanwhile, commodity and oil prices also bounced back. Specifically, oil prices held above $72 Thursday after jumping the previous day on an unexpected fall in U.S. crude inventories, which suggested demand may be improving as the U.S. economy recovers from a severe recession.
But testing investors resilience early on were results from giant retailer Sears Holdings (NASDAQ: SHLD). It reported Thursday that it lost money in its second quarter, dragged down by store closings, severance and pension plan costs and lower sales. Excluding items Sears had a loss of $20 million, or 17 cents per share. Revenue 10% to $10.55 billion on the stronger dollar and same-store sale declines. Analysts forecast profit of 35 cents per share on revenue of $10.73 billion, according to Thomson Reuters.
Economic data released today includes: weekly jobless claims at 8:30 a.m., July leading indicators August Philadelphia Fed survey at 10:00 a.m.
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