US stocks climbed this morning on the heels of unexpectedly good global economic data.
Asian markets closed higher today as China's purchasing manager's index came in higher than expected in July. The government's official survey, which is tilted more toward large and state-owned enterprises, booked a small expansion in the manufacturing sector. The index came in at 50.1, just a hair above the break-even threshold of 50. HSBC's PMI survey, which counts more small firms, showed conditions worsening to 47.7 from 48.2 in June.
European equities also rose today as July PMI surveys added to the growing optimism that the continent is emerging from the doldrums. French manufacturing PMI rose to 49.7 from 48.4. Germany went from negative to positive, rising to a two-year high of 50.7 from 48.6. The European Union as a whole exceeded economists' expectations and rose to 50.3 from 48.8. Greece climbed to a 43-month high of 47.
Today also brings plenty of US economic data as well. Initial claims for unemployment insurance fell by 19,000 to 326,000. Economists expected claims to stay steady at 345,000. Challenger's job cut report also recorded fewer mass layoffs in July. This bodes well for tomorrow's employment situation report.
Later this morning we will read the latest US manufacturing PMI, which economists expect to rise to 53.1 from 51.9. Construction spending is slated to rise 0.4% in June after rising 0.5% in May.
After declining yesterday, Dow
(INDEXDJX:.DJI) futures were up 0.69% at 15,539 before the opening bell. Futures contracts on the S&P 500
(INDEXSP:.INX) rose 0.68% to 1,692.00 and Nasdaq
(INDEXNASDAQ:.IXIC) futures climbed 0.67% to 3,103.75. Oil futures were up 1.63% at $106.74/barrel for West Texas Intermediate crude.
In corporate news, JC Penney
(NYSE:JCP) shares fell 10.2% yesterday after the New York Post reported
that the retail chain is having credit problems. A major creditor, they reported, has stopped financing deliveries to stores.
(NYSE:XOM) shares are off nearly 2% after a disappointing earnings report this morning. Second quarter earnings fell 57% from a year earlier to $6.86 billion or $1.55 per share. Revenue fell to $106.5 billion from $127.4 billion a year ago.
(NYSE:CBS) shares gained 1.61% after reporting that net profit rose 10.5% to $472 million. Adjusted earnings per share were $0.76, which beat analyst expectations.
Automakers could see heavy trading today as they report July sales numbers. Total vehicle sales are expected to slow to an annual rate of 15.8 million from 16 million. Of those, 12.4 are expected to be domestic vehicles.
The Federal Reserve struck a more dovish tune, citing low inflation as a problem. Today, both the European Central Bank and the Bank of England voted to keep key interest rates unchanged. Europe and Britain's benchmark rates remain at 0.5%.
No positions in stocks mentioned.
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