Thursday October 29th


Futures hold lower after GDP, Fed

U.S. stock index futures indicated a lower open Thursday as investors weighed the possibility of a December rate hike and digested third-quarter GDP (gross domestic product), as well as a host of earnings data. In economic news, third-quarter GDP came in at 1.5 percent. Weekly jobless claims was 260,000. The Fed on Wednesday issued a surprisingly hawkish post-meeting statement, commenting specifically that it will be looking for progress in employment and labor when considering a rate hike at its December meeting. The fact the central bank specifically mentioned its next meeting immediately triggered a significant move up in market expectations for a Fed rate rise this year. U.S. stocks closed more than 1 percent higher Wednesday after the release of the Fed statement. Financials led S&P 500 advancers, with energy the second-best performer as oil surged 6.3 percent. "It's unambiguously positive to get the Fed out of the way," said Art Hogan, chief market strategist at Wunderlich Securities. "But in the near term ... we look at the futures market (lower). We're not giving back yesterday. We're cutting it in half." "One of the things that's going to be important to watch is WTI recapturing $45 and holding onto that," he said. Bond yields held higher in morning trade after rising Wednesday. The 10-year yield was 2.11 percent and the 2-year yield 0.72 percent as of 8:31 a.m., ET. On the earnings front, Aetna and Time Warner Cable were among the companies that reported before the bell. Baidu, Starbucks, Electronic Arts, LinkedIn, Western Union, Boston Beer, First Solar, Outerwall and SolarCity are among companies due to report after the bell. In Europe, the pan-European Stoxx 600 index was about half a percent lower Thursday morning. In Asia, Japan's Nikkei finished 0.17 percent higher, while in China the Shanghai Composite closed 0.38 percent higher. Crude oil futures fell on Thursday as the dollar strengthened on signs the Federal Reserve may raise U.S. interest rates in December. U.S. crude futures were down 46 cents at $45.48 a barrel by 7:57 a.m. EDT (1157 GMT). They rose more than 6 percent on Wednesday, snapping three days of losses. Brent crude was down 66 cents at $48.39 a barrel, after rising nearly 5 percent in the previous session. Gold rose on Thursday as the dollar retreated, but remained close to its lowest level in two weeks after the Federal Reserve hinted at a possible U.S. rate hike in December. Spot gold rose 0.17 percent to $1,157.33 an ounce, following a 1 percent slide in the previous session, when the metal fell to $1,152, its lowest since Oct. 13. U.S. gold futures slid 1.61 percent to $1,157 an ounce.