Stocks and Markets in the News | U.S. Futures Indications for August 23, 2012

By William L. Watts, MarketWatch 

FRANKFURT (MarketWatch) — U.S. stock-index futures held modest gains Thursday, buoyed by growing expectations that the Federal Reserve will soon unleash another round of monetary stimulus but capped by worries about the global-growth outlook after a round of weak purchasing-managers indexes from China and the euro zone. 

Futures on the Dow Jones Industrial Average DJU2 +0.12% rose 34 points, or 0.3%, to 13,190. 

S&P 500 Index futures SPU2 +0.12% advanced 3.6 points to 1,415.90, while Nasdaq 100 futures NDU2 +0.14% gained 6.75 points to 2,788. 

U.S. stocks recouped from lows to end near unchanged Wednesday, after minutes of the July 31-Aug. 1 meeting of the Fed’s rate-setting Federal Open Market Committee showed members discussed a third round of quantitative easing. Read: Fed minutes show active discussion of QE3 . 

“While the minutes were undoubtedly dovish, investors are mindful of the recent improvement in U.S. data,” said David Morrison, senior market strategist at GFT Markets in London. “Nonfarm payrolls and retail sales both came in better than expected, and Citi’s Economic Surprise Index has turned sharply higher since the beginning of the summer.” 

“So the U.S. data is in Goldilocks mode — not too hot; not too cold — while the major stock indices are trading at (in the case of the Nasdaq) or near (Dow/S&P) multiyear highs,” he said in emailed comments.

Asia, and China PMI

Asian stocks ended higher Thursday, finding support on hopes for a fresh round of Fed stimulus and shaking off a weak purchasing-managers-index reading for China’s manufacturing sector. Read: Asia stocks rise after China data, Fed minutes. 

 

Analysts said the drop in the index to a nine-month low of 47.8 in August underlined expectations that Chinese authorities will provide a further round of stimulus. 

Meanwhile, a preliminary August composite purchasing managers’ index for the euro zone edged higher but still pointed to further contraction in private-sector activity across a region that economists say appears to have entered a technical recession. Read Market Pulse; Euro-zoen Aug. PMI signals further contraction

The Stoxx 600 Europe index XX:SXXP +0.06% rose 0.2%. 

Markets Shrug Off Manufacturing Slowdown in China Manufacturing activity in China falls to a nine-month low, sending another signal that world's second largest economy continues to slowdown. The WSJ's Deborah Kan speaks with DJN's Hong Kong Bureau Chief, Jeffry Ng. 

U.S. investors attempting to further gauge prospects for further stimulus from the Fed can look to upcoming data, including the latest take on weekly jobless claims at 8:30 a.m. Eastern. 

Economists surveyed by MarketWatch expect that first-time claims for unemployment benefits rose to 369,000 in the week ended Aug. 18, from 366,000 the previous week. 

The Markit flash PMI for August is scheduled for 8:55 a.m., while July new-home-sales data are scheduled for 10 a.m.

Reuters

Shares of Hewlett-Packard Co. HPQ -3.66% fell more than 5% in Frankfurt trading. The computer maker said after Wednesday’s close that it swung to a third-quarter loss on massive impairment charges. On an adjusted basis, the company turned a profit that topped most forecasts.

Results are expected ahead of the opening bell from Big Lots Inc. BIG +0.28% , Hormel Foods Corp. HRL -0.32% and others. 

Nymex crude-oil futures CLV2 +0.46% rose 76 cents to $98.02 a barrel in electronic trade. 

Gold futures GCZ2 +1.16% jumped $24.80 an ounce to trade at $1,665.50, adding to strong gains scored the previous day on expectations for further quantitative easing by the Fed. 

The dollar index DXY -0.13% , which measures the U.S. unit against a basket of six other major currencies, fell to 81.45 from 81.475 in North American trade late Wednesday. 

The euro EURUSD +0.14% rose to $1.2549 versus $1.2535, while the dollar advanced to ¥78.54 yen, up from ¥78.43. 

William L. Watts is MarketWatch's European bureau chief, based in Frankfurt.