By Tomi Kilgore
U.S. stock futures wavered to start the month, a day after the
Dow Jones Industrial Average rose to its first record close of
2014.
With most of Europe closed for the May Day holiday, trading was
expected to be relatively muted in the early going.
About 90 minutes ahead of the open, Dow futures eased four
points, or less than 0.1%, to 16507. On Wednesday, the Dow rose 45
points, or 0.3%, to close at a record high and in positive
territory for the year. The Federal Reserve said Wednesday it would
continue to reduce its bond purchases, pointing to improving
economic growth following a slow winter.
On Thursday, S&P 500 index futures were virtually flat at
1878 and Nasdaq-100 futures ticked up seven points, or 0.2%, to
3580. Changes in stock futures don't always accurately predict
stock moves after the opening bell.
The S&P 500 closed Wednesday within 0.4% of its April 2
record closing high of 1890.90. The index posted its third-straight
monthly gain in April, and the seventh gain in eight months.
The tech-heavy Nasdaq Composite Index declined for two straight
months for the first time since May 2012, highlighting the recent
weakness in the biotechnology and consumer Internet sectors.
The outlook for corporate earnings continues to improve,
underpinning the broader market's gains. With 65% of the S&P
500 having reported first-quarter results, overall earnings per
share are now seen rising 1% from year-ago levels, according to
FactSet, versus expectations of a 1.2% decline at the end of March.
Revenue is seen growing 2.6% from last year, according to
FactSet.
"What we're seeing is the Fed is agreeing with what the market
is showing: the economy is relatively healthy and the earnings
season confirms this as well," said Chris Hobart, chief executive
of Hobart Financial Group, which has over $300 million in assets
under management. "Earnings expectations were set lower than
typical, and they haven't been horrific."
At 8:30 a.m. Eastern, initial claims for jobless benefits in the
latest week are expected to decline to 320,000 from 329,000 the
week before.
At the same time, personal income for March is seen rising 0.4%
on the month, consumer spending is forecast to increase 0.6% and
personal consumption expenditures are expected to be up 0.2%.
After the open, the Institute for Supply Management's
manufacturing purchasing managers index for April is seen rising to
54.3 from 53.7 in March, while construction spending for March is
expected to increase 0.5%.
But investors will be looking ahead to the government's monthly
employment report on Friday.
The yield on the 10-year Treasury note edged higher to 2.663%
from 2.647% late Wednesday.
Among early stock movers, Yelp surged 9.3% in premarket trading
after reporting late Wednesday a narrower-than-expected
first-quarter loss and lifting its full-year revenue outlook.
DirecTV climbed 7.5% after The Wall Street Journal reported the
satellite-TV company was approached by AT&T about a possible
acquisition in a deal that would likely be worth at least $40
billion. Dow component AT&T slipped 1%.
Gold futures fell 0.9% to $1,283.80 an ounce, on track to extend
their losing streak to four sessions. Crude-oil futures lost 0.6%
to $99.15 a barrel, after suffering in April the biggest monthly
decline since November 2013.
The U.K. stock market, which was one of the few European markets
open Thursday, rose after a better-than-expected reading on
manufacturing activity in April. The U.K.'s FTSE 100 index rose
0.3%, helping lift the Stoxx Europe 600 up 0.1%.
Most Asian markets were closed for Labor Day. Of the few markets
open, Japan's Nikkei Stock Average rallied 1.3% following solid
corporate earnings reports.
In other corporate news, Weight Watchers rallied 13% after the
company's reported late Wednesday first-quarter adjusted earnings
that were well above analyst estimates and lifted its full-year
outlook.
ConocoPhillips tacked on 1.6% after first-quarter adjusted
earnings and revenue rose more than expected, boosted by higher
average selling prices for natural gas and increased
production.
MetLife fell 2.6% after the life insurer reported late Wednesday
disappointing first-quarter operating earnings and revenue.
Write to Tomi Kilgore at tomi.kilgore@wsj.com