Thursday May 16th

16-05-2019

Dow set to rise more than 100 points as Cisco and Walmart gain on earnings

U.S. stock index futures pointed to positive start to the trading day on Thursday as investors weigh strong earnings against lingering trade-war fears. At 6:45 a.m., Dow Jones Industrial Average futures pointed to a gain of 109 points at the open. Futures on the S&P 500 and Nasdaq 100 indexes were also higher. Shares of Cisco Systems outperformed in the premarket, trading 3.5% higher on the back of quarterly numbers that topped analyst expectations. The company also issued on Wednesday better-than-expected revenue guidance for the current quarter. Walmart also reported quarterly earnings that topped expectations, sending its stock up 1.4% before the bell. But the gains were capped as Wall Street continued to fret over the ongoing trade spat between China and the U.S. Investors had largely priced in the two countries striking a deal this month. Instead, the U.S. hiked tariffs on $200 billion worth of Chinese imports. China retaliated with higher tariffs on $60 billion worth of goods. On top of that,  President Donald Trump declared on Wednesday a national emergency over threats against American technology. This move is expected to be followed by a ban on U.S. firms doing business with Huawei, a Chinese telecommunications company. The U.S. Department of Commerce announced the addition of Huawei Technologies and its affiliates to the Bureau of Industry and Security (BIS) Entity List, making it more difficult for the Chinese telecom giant to conduct business with U.S. companies. The major stock indexes are all down more than 3% this month. Trade worries were eased slightly on Wednesday after CNBC reported Trump plans to postpone auto tariffs by up to six months. The White House faces a Saturday deadline to decide whether to slap duties on car and auto part imports over national security concerns. The news sent stock higher for the day, with the Dow erasing a 190-point decline. On the data front, the number of people who applied for unemployment benefits last week fell to the lowest level in a month, dragging new jobless claims back near a post-recession low and suggesting all is well in the U.S. labor market. Initial jobless claims, a rough way to measure layoffs, sank by 16,000 to a seasonally adjusted 212,000 in the seven days ended May 11, the government said Thursday. Economists polled by MarketWatch estimated new claims would total 217,000. Shares in Asia were mixed on Thursday, as the U.S. takes aim at China’s Huawei again, heating up trade tensions further. Mainland Chinese shares rose on the day, with the Shanghai composite adding 0.58% to 2,955.71 and the Shenzhen composite gaining 0.437% to 1,584.81. In Hong Kong, the Hang Seng index rose 0.31%, as of its final hour of trading. The Nikkei 225 in Japan slipped 0.59% to close at 21,062.98, while the Topix declined 0.43% to finish its trading day at 1,537.55. Over in South Korea, the Kospi dropped 1.20% to close at 2,067.69. Oil prices rose on Thursday for a third day running as fears of supply disruption amid heightened tensions in the Middle East overshadowed swelling U.S. crude inventories. Brent crude futures were up 97 cents, or 1.4%, at $72.72 a barrel at 7:21 a.m. ET (1121 GMT). Brent, the international benchmark for oil prices, is heading for its biggest weekly rise in six weeks. U.S. West Texas Intermediate crude futures rose 82 cents, or 1.3%, to $62.84 per barrel. Gold slipped on Thursday, pressured by technical selling after repeatedly failing to breach $1,300 this week, though U.S. sanctions on Chinese telecoms company Huawei dented risk appetite and limited bullion’s losses. Spot gold was down 0.2% at $1,294.31 an ounce, holding in a relatively narrow range of about $4. U.S. gold futures were down 0.2% at $1,294.90.