U.S. MARKET AVERAGES
U.S. stocks are trading down, awaiting a number of economic reports due later in the day. Retailers and automakers are expected to release their sales reports for August. Data on jobless claims, personal income and the manufacturing index are also in the focus.
Before the close of the Wednesday trading session stocks gained ground as crude-oil prices decreased and traders centered their attention on heavy-equipment companies and homebuilders like Caterpillar Inc. and D.R. Horton Inc.
Costco Wholesale posted a 9% growth in comparable August sales. Haggar Corp. said it has agreed to be purchased by Infinity Associates, Perseus and Symphony Holdings for $212 million.
IBM has signed a global contract with Dutch global bank ABN AMRO worth about 1.5 billion euro over 5 years.
Novartis, Swiss pharmaceutical company, offered $4.5 billion to gain full control of U.S. vaccines maker Chiron. Novartis already owns just over 42% of Chiron.
American Eagle Outfitters Inc. reported 11.8% increase in its August same-store sales and backed its 3Q earnings guidance. Whole Foods Market Inc. announced $5 to $6 million sales growth in 4Q due to Hurricane Katrina American Eagle Outfitters Inc. reported 11.8% increase in its August same-store sales and backed its 3Q earnings guidance. Whole Foods Market Inc. announced $5 to $6 million sales growth in 4Q due to Hurricane Katrina.
Del Monte Foods Co. is expected to report earnings of 5 cents a share before the bell Thursday. Also expected to report are Ciena Corp., Corinthian Colleges Inc., JDS Uniphase Corp. and H&R Block Inc..
ECONOMIC NEWS
Personal income and spending for July readings are due on Thursday. Economists forecast personal incomes climbed 0.5% in July after a similar rise in the previous month. Personal spending is expected to advance to 1% after adding 0.8%.
The August data on manufacturing from the Institute for Supply Management is also scheduled today with expectation of the reading to advance to 57 vs. 56.6.
Truck and auto sales for August are forecasted to drop vs. the previous month. Economists expect car and light truck sales dropping to an annual rate of about 14.1 million from July's 17 million, fueled by automakers' offer of employee discounts.
Top retailers report August sales results Thursday. Same-store sales likely will rise about 4 percent collectively, estimates Mike Niemira, chief economist at International Council of Shopping Centers. That will be slightly ahead of the 3.8 percent same-store sales gain the retailers have posted so far this year.
The Labor Department is due to release jobless claims data for the week ended Aug. 27 at 8:30 a.m. Economists expect claims to have been unchanged at 315,000 in the latest week.
The Commerce Department is due to release the construction spending report for July at 10 a.m. Economists forecast spending up 0.5 percent for July.
INTERNATIONAL MARKET NEWS
Tokyo hit a four-year closing high, following U.S. news that government would tap into oil reserves and after results from a poll implied the ruling coalition would win this month's general election. Tokyo's Nikkei 225 index added 0.8%, to 12,506.
Elsewhere in the Asian region markets advanced on oil’s retreat below $70 a barrel. Hong Kong's Hang Seng Index ended up 1.6% to 15,143 and Singapore's Straits Times Index gained 0.9% to 2,295. Australia's All-Ordinaries Index added 1.1% to 4.460, while Seoul's Composite Index climbed 2.1% to 1,106.
European markets are trading in the positive territory at mid-day, making solid gains on the back of automakers and airlines shares which advanced on declining oil prices below $70 a barrel, as well as on upbeat earnings news. Auto makers Volkswagen, BMW, Daimler Chrysler and airlines Deutsche Lufthansa and Air France-KLM went higher. Drug maker Novartis and insurance giant Swiss Re were also in the focus. The German DAX 30 added 1.6%, the French CAC 40 gained 0.6%, and London’s FTSE 100 rose 0.4%.
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