MarketWatch.com - Pre-Market Indications

Thursday, January 13, 2011

Indications: U.S. futures edge down ahead of jobs, trade data

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By Polya Lesova, MarketWatch

LONDON (MarketWatch) â€" U.S. stock futures edged lower on Thursday, as caution dominated ahead of data on the labor market and international trade.

Futures on the Dow Jones Industrial Average /quotes/comstock/21b!f:dj\h11 (DJH11 11,695, -13.00, -0.11%)  slipped 14 points to 11,694 and S&P 500 futures /quotes/comstock/21m!f:sp\h11 (SPH11 1,281, -2.30, -0.18%)  fell 1.70 points to 1,281.70.

Nasdaq 100 futures /quotes/comstock/21m!f:nd\h11 (NDH11 2,303, -1.50, -0.07%)  dropped 1.25 points to 2,303.20.

Bank of Korea’s rate surprise

South Korea joins the Asian trend of raising interest rates, surprising economists.

The blue-chip Dow index /quotes/comstock/10w!i:dji/delayed (DJIA 11,755, +83.56, +0.72%)  rose 0.7% to end at 11,755.44 on Wednesday, posting its highest close since August 2008.

On the economic front, data on weekly jobless claims, December producer prices and November international trade will be released at 8:30 a.m. Eastern time on Thursday.

Later in the day, Federal Reserve Chairman Ben Bernanke will speak at a small-business lending forum.

European markets were mixed after the previous session’s rally. The Stoxx Europe 600 index /quotes/comstock/22c!sxxp (ST:STOXX600 284.15, -1.64, -0.57%)  fell 0.5% in intraday trading, while Spain’s benchmark index rose 2%, as shares of Banco Santander SA /quotes/comstock/06x!e:san (ES:SAN 8.53, +0.29, +3.56%)   /quotes/comstock/13*!std/quotes/nls/std (STD 10.89, +1.22, +12.61%)  surged nearly 5%.

The Spanish government sold 3 billion euros ($3.9 billion) in five-year bonds, though its borrowing costs rose compared to a November auction. Italy also successfully conducted a bond sale.

“There shouldn’t be any major surprises in these auctions as the process is being heavily managed by the authorities, but the level of yields/participation in these deals are worth noting,” Deutsche Bank said in a note published ahead of the auctions.

The euro gained 0.3% to $1.3162 following the auctions. The dollar index /quotes/comstock/11j!i:dxy0 (DXY 80.11, +0.08, +0.09%) , which tracks the performance of the greenback against a basket of other major currencies, was nearly flat at 79.946.

ECB’s Trichet in spotlight

The Bank of England and the European Central Bank are both expected to keep monetary policy on hold Thursday. The market’s focus will be on ECB President Jean-Claude Trichet’s press conference, which will start at 8:30 a.m. Eastern.

Trichet is certain to be asked about the ECB’s role in the euro-zone bond markets and its plans about an eventual exit from its accommodative monetary policy given rising inflationary pressures.

Shares of insurance giant American International Group Inc. /quotes/comstock/13*!aig/quotes/nls/aig (AIG 58.40, -0.64, -1.08%)  may see active trading after the firm said late Wednesday that it expects to close its recapitalization Friday and repay the U.S. government fully for the aid it received during the financial crisis.

After the U.S. market closes, chip giant Intel Corp. /quotes/comstock/15*!intc/quotes/nls/intc (INTC 21.30, +0.25, +1.20%)  is expected to report fourth-quarter earnings of 53 cents a share, according to a survey of analysts by FactSet Research.

In Asia overnight, stock markets finished mostly higher, with Japan’s Nikkei Stock Average rising 0.7%.

And in the commodity markets, oil futures fell 15 cents to $91.71 a barrel in electronic trading on Globex and gold futures slipped $6.10 to $1,379.80 an ounce.

Polya Lesova is chief of MarketWatch’s London bureau.

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