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Thursday, August 5, 2010

Indications: Stock futures flat as ECB, BOE stay on hold

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By Polya Lesova, MarketWatch

Stock futures flat as ECB, BOE stay on hold

FRANKFURT (MarketWatch) -- U.S. stock futures traded little changed Thursday, as investors displayed caution ahead of jobless-claims data and after the European Central Bank and the Bank of England left their lending rates unchanged, as expected.

Futures on the Dow Jones Industrial Average added 8 points to 10,643, and Nasdaq 100 futures gained 1.75 points to 1,907. S&P 500 futures were virtually unchanged at 1,124.80.

The Dow /quotes/comstock/10w!i:dji/delayed (DJIA 10,680, +44.05, +0.41%) rose 0.4% Wednesday to end at 10,680.43, its highest close since May 13.

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Data on U.S. weekly jobless claims will be released at 8:30 a.m. Eastern time. The report comes a day ahead of the key nonfarm payrolls report for July.

The European Central Bank kept its key lending rate unchanged at a record low of 1%. Attention now turns to the press conference of ECB President Jean-Claude Trichet, which is scheduled to begin at 8:30 a.m. Eastern.

"There is likely to be a large focus towards the ECB post-rate news conference as the market seeks more details on the outlook for the European recovery," said Joshua Raymond, market strategist at City Index, in a note to clients.

The Bank of England also made no change to monetary policy, leaving its key lending rate at a record low 0.5%.

Many U.S. retailers were reporting same-store sales for July. Costco Wholesale Corp. /quotes/comstock/15*!cost/quotes/nls/cost (COST 57.40, +1.06, +1.87%) said its July sales at stores open at least a year rose 6%. Analysts polled by Thomson Reuters had, on average, expected same-store sales to rise 5.5%.

PPL Corp. /quotes/comstock/13*!ppl/quotes/nls/ppl (PPL 27.72, +0.09, +0.33%) swung to second-quarter net income of $85 million, or 22 cents a share, from a loss of $7 million, or 2 cents a share, in the year-ago period.

Viacom Inc. /quotes/comstock/13*!via/quotes/nls/via (VIA 38.40, +0.34, +0.89%) said its second-quarter net income rose to $420 million, or 69 cents a share, from $277 million, or 46 cents a share, from the year-ago period.

Kraft Foods Inc. /quotes/comstock/13*!kft/quotes/nls/kft (KFT 29.75, +0.47, +1.61%) will release earnings after the market close.

European shares gain

The Stoxx Europe 600 index /quotes/comstock/22c!sxxp (ST:SXXP 262.45, +0.28, +0.11%) gained 0.5% in afternoon trading.

Mining giant Rio Tinto /quotes/comstock/13*!rtp/quotes/nls/rtp (RTP 54.72, +0.12, +0.22%) /quotes/comstock/23s!a:rio (UK:RIO 3,470, +58.00, +1.70%) said its first-half net profit soared to $5.85 billion and declared an interim dividend of 45 cents a share.

Banking group Barclays PLC /quotes/comstock/13*!bcs/quotes/nls/bcs (BCS 21.71, -0.10, -0.46%) /quotes/comstock/23s!a:barc (UK:BARC 326.65, -13.20, -3.88%) reported a 29% rise in first-half net profit, but the bottom line was muddied by one-off gains. Shares of Barclays dropped 2.7% in London trading. Read more about Barclays.

In Germany, Deutsche Telekom AG /quotes/comstock/11i!dteg.y (DTEGY 13.75, +0.09, +0.66%) /quotes/comstock/11e!fdte (DE:DTE 10.43, -0.08, -0.71%) said its second-quarter net profit fell 9% to 475 million euros ($626 million).

Consumer-goods giant Unilever /quotes/comstock/13*!ul/quotes/nls/ul (UL 29.33, +0.41, +1.42%) /quotes/comstock/13*!ul/quotes/nls/ul (UL 29.33, +0.41, +1.42%) /quotes/comstock/23s!e:ulvr (UK:ULVR 1,744, -87.00, -4.75%) reported a 40% jump in second-quarter net profit, but its performance still disappointed investors as lower sales prices hurt the group's margin. Its shares dropped 3.6% in London. Read more about Unilever's results.

Shares of oil giant BP PLC /quotes/comstock/13*!bp/quotes/nls/bp (BP 39.39, -0.61, -1.53%) /quotes/comstock/23s!a:bp. (UK:BP. 424.65, +3.00, +0.71%) gained 2% after the firm said it has received authorization to conduct cementing operations on the Macondo well in the Gulf of Mexico. The actions are part of the so-called static kill procedure to stop the flow of oil from the well.

Meanwhile, officials from the European Union and the International Monetary Fund said that the Greek economic program has "made a strong start."

The quantitative performance criteria have all been met, and important reforms are ahead of schedule, officials said after they completed their first review of the program. Read more about Greece's economy.

The euro /quotes/comstock/21o!x:seurusd (EURUSD 1.3213, +0.0061, +0.4638%) gained 0.3% to $1.3195. German manufacturing orders rose 3.2% in June compared to the previous month, exceeding economists' expectations, government data showed.

The dollar index /quotes/comstock/11j!i:dxy0 (DXY 80.63, -0.26, -0.33%) , which tracks the performance of the greenback against a basket of other major currencies, edged down 0.2% to 80.744.

In the commodity markets, gold futures gained $2.70 to $1,198.60 an ounce in electronic trading on the New York Mercantile Exchange. Oil futures edged lower to trade at $82.27 a barrel.

Asian stocks finished mostly higher, with Japan's Nikkei Stock Average index ending up 1.7%. However, China's Shanghai Composite index fell 0.7%.

Polya Lesova is a reporter for MarketWatch, based in Frankfurt.

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