Stocks set for higher start

By CNNMoney.com staff


NEW YORK (CNNMoney.com) -- U.S. stocks were poised for a higher open Thursday after JPMorgan Chase reported better-than-expected earnings and weekly jobless claims fell to the lowest level in almost two years.

Dow Jones industrial average (INDU), S&P 500 (SPX) and Nasdaq (COMP) futures were up ahead of the opening bell.

Futures measure current index values against perceived future performance.

Strong quarterly earnings have helped boost stocks, but investors have been on edge after reports from the Federal Reserve and China raised worries about the global economic outlook.

"In the short term, everything is being driven by earnings," said Len Blum, managing director at Westwood Capital. "But in the longer term, the question is where is the economy really going and do we have enough momentum to get out of the recession?"

Companies: JPMorgan Chase reported second-quarter results before the opening bell, posting a profit of $4.8 billion. The earnings growth, partly due to a rebound in consumer lending, beat analysts' expectations.

Shares of JPMorgan (JPM, Fortune 500) rose more than 1% in pre-market trading.

Also on tap Thursday, Internet giant Google (GOOG, Fortune 500) is scheduled to report its quarterly earnings after the market close.

Shares of NBTY (NTY) jumped more than 45% ahead of the market open after the vitamin maker agreed to be bought by the Carlyle Group for $3.8 billion. Under the deal, the Carlyle Group will purchase NBTY's outstanding shares for $55 per share, a 47% premium above the stock's closing price on Wednesday.

GlaxoSmithKline said Thursday it will take a $2.4 billion pretax charge for legal settlements. Among the settlements were those involving the diabetes drug Avandia, which has been linked to an increased risk of heart failure. An FDA advisory panel voted Wednesday to recommend leaving Avandia on the market, but with changes in how it's prescribed.

Glaxo shares rose more than 2% in premarket trading.

China: While China's economy continued to grow last quarter, the pace eased, a government report showed Thursday.

China's gross domestic product, the broadest measure of economic output, grew at an annual rate of 10.3% in the second quarter, down from the 11.9% rate during the first quarter.

Fed: Minutes from the Federal Reserve's June policy meeting released Wednesday showed that Fed officials are less optimistic about the health of the economy.

The central bank also lowered its forecast for U.S. gross domestic product, expecting GDP to grow between 3% and 3.5% this year, down from its earlier outlook of 3.2% to 3.7%.

Economy: The Department of Labor said jobless claims fell more than expected last week. The number of Americans filing new claims for unemployment dropped 29,000 to 429,000, the lowest level since August 2008. Economists were expecting claims to slip to 450,000 from an upwardly revised from 458,000 in the previous week.

The Producer Price Index, a measure of wholesale inflation, fell 0.5%, the Commerce Department said. The index was expected to have declined 0.1% in June after dropping 0.3% in May.

The so-called core PPI, which excludes volatile food and energy prices, edged up 0.1% as expected, after rising 0.2% in the previous month.

The Empire manufacturing survey, a reading of manufacturing in the New York area, plunged to 5.08 in July from 19.57 in June. Economists were expecting the measure to fall to 18.

Reports on industrial production and capacity utilization are on tap for later Thursday.

World markets: European shares were higher in morning trading. The DAX in Germany gained 0.5%, France's CAC 40 rose 0.4% and Britain's FTSE 100 edged up 0.09%.

In Asia, the Nikkei in Japan dropped 1.1%, the Shanghai Composite fell 1.9% and the Hang Seng in Hong Kong slid 1.5%.

Dollar and commodities: The dollar was down against the euro, the British pound and the Japanese yen.

U.S. light crude oil for August delivery rose 46 cents to $77.50 a barrel.

COMEX gold's August contract gained $7.50 to $1,214.50 per ounce.

Bonds: Treasury prices fell, pushing the yield on the 10-year note up to 3.06% from 3.05% late Wednesday. Bond prices and yields move in opposite directions.

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Dow 29,348.10 50.46 0.17%
Nasdaq 9,388.94 31.81 0.34%
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Treasuries 1.84 0.03 1.49%
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Company Price Change % Change
Advanced Micro Devic... 50.93 1.16 2.33%
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Apple Inc 318.73 3.49 1.11%
Microsoft Corp 167.10 0.93 0.56%
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