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Futures Pointing To Extended Rebound On Wall Street

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February 15 2024 4:05AM

The major U.S. index futures are currently pointing to a modestly higher open on Thursday, with stocks likely to extend the rebound from Tuesday’s sell-off seen during Wednesday’s session.

The futures edged higher following the release of a slew of U.S. economic data, including a Commerce Department report showing retail sales fell by much more than expected in the month of January.

The Commerce Department said retail sales slid by 0.8 percent in January after climbing by a downwardly revised 0.4 percent in December.

Economists had expected retail sales to edge down by 0.1 percent compared to the 0.6 percent increase originally reported for the previous month.

Excluding sales by motor vehicle and parts dealers, retail sales fell by 0.6 percent in January after rising by 0.4 percent in December. Ex-auto sales were expected to rise by 0.2 percent.

Treasury yields have moved lower following the release of the report, potentially signaling renewed optimism about the possibility of near-term interest rate cuts.

Meanwhile, the Labor Department released a separate report showing an unexpected decline in first-time claims for unemployment benefits in the week ended February 10th.

The report said initial jobless claims fell to 212,000, a decrease of 8,000 from the previous week’s revised level of 220,000.

Economists had expected initial jobless claims to inch up to 220,000 from the 218,000 originally reported for the previous week.

The Labor Department also released a separate report this morning showing an unexpected increase U.S. import prices in the month of January.

Stocks showed a strong move back to the upside during trading on Wednesday, partly offsetting the sell-off seen during Tuesday’s session. The major averages all moved higher on the day, with the tech-heavy Nasdaq leading the rebound.

After plunging by 1.8 percent Tuesday’s trading, the Nasdaq surged 203.55 points or 1.3 percent to 15,859.15. The S&P 500 also jumped 47.45 points or 1.0 percent to 5,000.62, while the Dow climbed 151.52 points or 0.4 percent at 38,424.27.

The rebound on Wall Street partly reflected bargain hunting, with some traders seeing the sharp pullback on Tuesday as a buying opportunity amid ongoing optimism about the outlook for the markets.

While hotter-than expected inflation data further pushed back interest rate cut expectations, signs of continued strength in the economy is still expected to benefit the markets in the longer term.

The Federal Reserve is also still likely to begin lower interest rates sometime in the coming months even if traders have to wait until June.

Nonetheless, the major averages remained well off their recent highs ahead of the release of an avalanche of data before the start of trading on Thursday.

Among individual stocks, shares of Lyft (NASDAQ:LYFT) skyrocketed by 35.1 after the ride-hailing company reported better than expected fourth quarter results and provided upbeat guidance.

Investing platform Robinhood (NASDAQ:HOOD) also spiked by 13.0 percent after reporting fourth quarter results that exceeded analyst estimates on both the top and bottom lines.

On the other hand, shares of Akamai Technologies (NASDAQ:AKAM) plunged by 8.2 percent after the server network provider reported better than expected fourth quarter earnings but weaker than expected revenues.

Computer hardware stocks showed a strong move back to the upside on the day, with the NYSE Arca Computer Hardware Index soaring by 3.4 percent to a record closing high.

Substantial strength also emerged among tobacco stocks, as reflected by the 3.3 percent spike by the NYSE Arca Tobacco Index.

Semiconductor, networking and biotechnology stocks also saw considerable strength, contributing to the rebound by the tech-heavy Nasdaq.

Most of the other major sectors also rebounded on the day, with notable strength visible among steel, housing and airline stocks.