By Barbara Kollmeyer, MarketWatch Foot Locker, Splunk higher in
premarket
MADRID (MarketWatch) -- A dovish European Central Bank President
Mario Draghi and a rate cut from China's central bank triggered a
rally for stock futures on Friday, with the ground laid for another
record-setting session for Wall Street.
Futures for the Dow Jones Industrial Average (DJZ4) surged 114
points, or 0.6%, to 17,808, while those for the S&P 500 index
(SPZ4) jumped 28.75 points, or 0.6%, to 2,065.20. Futures for the
Nasdaq-100 index (NDZ4) rose 28.75 points, or 0.7%, to 4,274.
China's central bank cut its one-year loan rate by 0.4
percentage points and its one-year deposit rate by 0.25 percentage
points, and said it would allow more flexibility in deposit
rates.
Ahead of that, Draghi said the central bank will do what it
"must to raise inflation and inflation expectations as fast as
possible," at a banking conference in Frankfurt. The comments were
taken as a sign the ECB will step-up asset buying.
Correction off the table for now: After China's move, the
majority of the world's big central banks now have loose policies,
while there's growing consensus that the Fed and the Bank of
England will hold off near-term tightening, said Benjamin Yip,
senior analyst at Amplify Trading.
"In light of this, stocks have been bid for the majority of the
morning session and apart from some de-risking of portfolios and
balance sheets ahead of the weekend, we cannot see any reason for a
major correction," Yip said in a note.
On Thursday, the S&P 500 (SPX) logged its 44th record close
this year, though just a marginal 0.2% gain to 2,052.75. The Dow
industrials (DJI) logged a 27th record close. Trading volumes were
thin, something Goldman Sachs said investors should get used to in
the coming year. See also: Crash-caller Schiff says Fed will cause
the next one
Stocks to watch: Shares of Foot Locker Inc.(FL) rose 2% after
the sports retailer's profit and sales beat estimates. Another
sports retailer, Hibbett Sports Inc.(HIBB), jumped 4% after lifting
its outlook. Ann Inc.(ANN) will also report.
Gap Inc.(GPS) could see premarket pressure, after results late
Thursday missed Wall Street forecasts and the retailer delivered a
disappointing full-year outlook.
Splunk Inc.(SPLK) rose 8% after results topped analysts
forecasts.
GameStop Corp.(GME) fell 9% after a set of weak results and
outlook late Thursday.
Wynn Resorts Ltd.(WYNN) may take a hit in premarket trading,
after The Wall Street Journal reported, citing sources, that the
casino operator is being investigated by federal authorities over
whether it broke money-laundering rules.
Europe rallies, euro hit: Europe got a big lift from Draghi's
comments and China, with the Stoxx 600 index up 1.7%, while the
euro (EURUSD) slid against the dollar. The yen(USDJPY) rose against
the dollar to around Yen117.83 after Japan Finance Minister Taro
Aso said the yen decline had been "too fast." The Nikkei 225
snapped a four-day losing streak, rising along with the yen.
Among other assets, gold (GCZ4) and oil prices (CLF5) were also
higher.
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