Stocks are set to open little changed Thursday morning as investors react to mixed economic news and wait for a second day of testimony from Federal Reserve Chairman Ben Bernanke. Thirty minutes before the opening bell on Wall Street, stock index futures indicated that the Dow Jones Industrials ($INDU) might add 15 or 20 points in early trading. The NASDAQ ($COMPQ) is expected to open flat or modestly lower.
With the earnings-reporting season winding down, attention is shifting to the economic outlook. Today's news is mixed. The Labor Department is reporting an unexpected surge in weekly jobless claims. According to the latest report, the number of filings for jobless benefits rose by 46,000 to 357,000 in the week ended January 10. Economists were looking for a 4,000 rise.
However, the latest NY Empire State Index was much better than expected. The gauge of regional manufacturing activity surged to 24.4 in February, up from 9.1 the month before. Economists were looking for a rise to 11.0.
January industrial production and capacity utilization numbers are due out at 9:15 a.m. Eastern time. Economists look for readings of +.1% and 81.7%, respectively. The Philadelphia Fed Survey of manufacturing activity is due out at noon. Expectations are that the gauge of regional manufacturing activity plunged to only 4.0 in February, down from 8.3 the month before.
Fed Chairman Ben Bernanke gives a second day of congressional testimony today. Yesterday, the Fed Chief soothed the financial markets with talk of modest growth and contained inflation. The Dow rallied 87 points and the NASDAQ added 28.5. Today, the prepared remarks will be the same, but the question and answers period always holds the potential for a few gaffs.
Bonds have been trading higher since Bernanke's comments. The benchmark ten year Treasury note (March) rallied 17 ticks on Wednesday and is up another 5 ticks this morning. The yield on the ten year has now fallen through the 4.75% level, compared to more than 4.9% less than one month ago. Meanwhile, crude oil is up 13 cents to $58.13. Gold (April) is up $1.80 to $673.60.
In stock news, Baker Hughes (BHI) is set to open lower after the oil driller reported profits of $1.02 a share, which missed analyst estimates by 17 cents. Baidu.com (BIDU) is down $3.15 to $111.81 after UBS AG cut the stock to "reduce" from "neutral." Nutrisystems (NTRI) is trading up more than 11% after the company raised its first quarter earnings forecast to 88 cents to 92 cents a share, compared to previous expectations of 87 cents.
Overall, the day's stock news is light and the focus remains squarely on the economic front. In addition to testimony from Bernanke, the economic data holds market moving potential. In addition to today's numbers, key data is due out tomorrow morning. The list of reports for Friday includes the Producer Price Index [PPI], consumer sentiment, and housing starts.
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