The major U.S. index futures are pointing to a higher opening on Thursday, with stocks looking to extend the upward trend seen over the past several sessions.
Upbeat earnings news from some big-name retailers may generate early buying interest on Wall Street, as the major averages seek to extend their five-session winning streak.
Traders also continue to respond to the minutes of the Federal Reserve’s latest monetary policy meeting, which included an outline of a plan to trim its $4.5 trillion balance sheet.
Stocks moved mostly higher over the course of the trading session on Wednesday, extending their recent winning streak to five sessions. With the continued advance on the day, the S&P 500 reached a new record closing high.
The major averages ended the day just off their highs of the session. The Dow climbed 74.51 points or 0.4 percent to 21,012.42, the Nasdaq advanced 24.31 points or 0.4 percent to 6,163.02 and the S&P 500 rose 5.97 points or 0.3 percent to 2,404.39.
The continued strength on Wall Street came following the release of the minutes of the Federal Reserve’s latest monetary policy meeting.
The minutes of the meeting noted that growth in economic activity had slowed, although the Fed members agreed that the slower growth during the first quarter was likely to be transitory.
Most participants subsequently said it would soon be appropriate for the Fed to take another step in removing some policy accommodation.
The Fed is widely expected to raise interest rates at its next meeting in mid-June, with CME Group’s FedWatch tool indicating an 83.1 percent chance of a quarter-point rate hike.
However, the minutes said members generally judged it would be prudent to await additional evidence indicating that the recent slowing in the pace of economic activity had been transitory before raising rates.
The comment may increase the focus on the economic data due to be released in the weeks leading up to the June meeting.
The Fed minutes also said staff offered a briefing on a possible approach to winding down the central bank’s $4.5 trillion balance sheet.
Nearly all policymakers expressed a favorable view of the approach, which was seen as consistent with the intention to reduce the Fed’s securities holdings in a gradual and predictable manner.
Under the proposed approach, the Fed would announce a set of gradually increasing caps on the dollar amounts of Treasury and agency securities that would be allowed to run off each month.
Only the amounts of securities repayments that exceeded the caps would be reinvested each month, the minutes said.
Meanwhile, traders largely shrugged off a report from the National Association of Realtors showing a bigger than expected pullback in existing home sales in the month of April.
NAR said existing home sales fell by 2.3 percent to an annual rate of 5.57 million in April after jumping by 4.2 percent to a ten-year high of 5.70 million in March. Economists had expected sales to drop to a rate of 5.65 million.
Gold stocks showed a significant turnaround over the course of the session after coming under pressure in morning trading. Reflecting the strength that emerged in the sector, the NYSE Arca Gold Bugs Index climbed by 1.1 percent.
The rebound by gold stocks came as the price of the precious metal moved higher in electronic trading after ending the regular session lower.
Electronic storage, commercial real estate, and chemical stocks also saw some strength on the day, although buying interest was relatively subdued.
On the other hand, steel stocks saw significant weakness on the day, giving back ground after moving notably higher in the previous session. After surging up by 2.1 percent on Tuesday, the NYSE Arca Steel Index dropped by 1.5 percent
Considerable weakness was also visible among energy stocks, with the Philadelphia Oil Service Index and the NYSE Arca Natural Gas Index sliding by 1.3 percent and 1.2 percent, respectively.
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