MarketWatch.com - Pre-Market Indications

Thursday, October 7, 2010

Indications: U.S. stock futures edge up as gold rallies

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By Simon Kennedy, MarketWatch

LONDON (MarketWatch) â€" U.S. stock-index futures edged marginally higher on Thursday as investors awaited the start of the third-quarter earnings season, while gold futures soared to yet another record.

Futures for the Dow Jones Industrial Average /quotes/comstock/21b!f:dj\z10 (DJZ10 10,950, +44.00, +0.40%)  rose 8 points to 10,914 and S&P 500 futures /quotes/comstock/21m!f:sp\z10 (SPZ10 1,161, +4.80, +0.42%)  were up 1.4 points at 1,157.10.

Futures on the Nasdaq 100 /quotes/comstock/21m!f:nd\z10 (NDZ10 2,010, +5.75, +0.29%)  gained a quarter of a point to 2,004.50.

The moves came after a mixed session for U.S. markets Wednesday, in which the Dow industrials /quotes/comstock/10w!i:dji/delayed (DJIA 10,968, +22.93, +0.21%)  posted a modest gain, while the technology-laden Nasdaq was hit by heavy losses for some software and data-storage stocks.

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The traditional start to earnings season will come after markets close with the announcement of Alcoa Inc.’s /quotes/comstock/13*!aa/quotes/nls/aa (AA 12.37, +0.23, +1.89%)  third-quarter results. The group is expected to post a profit of 7 cents a share.

Before that, PepsiCo Inc. /quotes/comstock/13*!pep/quotes/nls/pep (PEP 68.11, +0.35, +0.52%)  reported a 12% rise in fiscal third-quarter profit to $1.92 billion, or $1.19 a share. The company also slightly lowered its outlook for the year, saying earnings per share at constant exchange rates should grow between 11% and 12%, compared to the previous forecast of growth between 11% and 13%.

The stock was down 1.2% in premarket trading.

The main U.S. data will be weekly jobless claims at 8:30 a.m. Eastern time. In Europe, the Bank of England left interest rates unchanged. The European Central Bank also left its key rate unchanged at 1%. See story on the Bank of England

The dollar was lower against other major currencies ahead of the jobless numbers and Friday’s closely watched nonfarm-payroll figures.

The euro rose 0.5% to $1.39838 and the Australian dollar hit its highest level against the U.S. currency in more than two decades.

Against the yen, the greenback dropped 0.7% to ¥82.361, taking the dollar back below levels that caused Japanese authorities to intervene in currency markets last month.

Bad economic news out of Europe in recent days, including another downgrade of Ireland and the need to revise Greek deficit figures higher, has been largely ignored by currency markets, while any signs of weakness in the U.S. have been pounced upon, said economists at DZ Bank in a note to clients.

“Dollar bashing is all the vogue and the bad news out of the U.S. has certainly made it easy for all of those looking for an excuse to sell dollars,” the bank said.

It added that the government will be secretly happy with a weaker currency and that exchange rates will be a major topic of discussion at upcoming World Bank, International Monetary fund and Group of 20 meetings in Washington.

“The result will, most likely, be more speculation than fact and once the weekend is behind us, the Bank of Japan should once more feel free to act,” DZ Bank said.

The weak dollar helped gold futures set another new record, with the December contract trading as high as $1,366 an ounce. Crude-oil futures were modestly higher. See story on Gold’s high

Among other companies in focus, shares of Immucor Inc. /quotes/comstock/15*!blud/quotes/nls/blud (BLUD 20.44, +0.14, +0.69%)  are likely to come under pressure after the biotech firm cut its outlook, citing weak industry demand.

Retailers also released their monthly same-stores sales updates Thursday. Among the first to announce figures was Stage Stores /quotes/comstock/13*!ssi/quotes/nls/ssi (SSI 12.81, -0.18, -1.39%) , which said same-store sales rose 1.8%, marginally beating the 1.5% consensus forecast.

In international markets, Japan’s Nikkei 225 Average closed down 0.1%, while the German DAX 30 index /quotes/comstock/30p!dax (DX:DAX 6,297, +26.67, +0.43%)  rose 0.2% in intraday trading. See Europe Markets

Simon Kennedy is the City correspondent for MarketWatch in London.

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