Modupe Gbadeyanka
By Investors Hub
The major U.S. index futures are pointing to a higher opening on Thursday following the mixed performance seen in the previous session. The upward momentum on Wall Street comes as traders digest the latest batch of earnings news as well as several U.S. economic reports.
Traders are also likely to keep an eye on developments in Washington, as House Republicans prepare to vote on a revised bill to repeal and replace Obamacare.
Nonetheless, trading activity may be somewhat subdued ahead of the release of the closely watched monthly jobs report on Friday.
After spending much of the day in negative territory, the major averages ended Wednesday’s trading mixed following the Federal Reserve’s monetary policy announcement. While the Dow managed to creep into positive territory, the Nasdaq pulled back off yesterday’s record closing high.
The Dow inched up 8.01 points or less than a tenth of a percent to 20,957.90, while the Nasdaq fell 22.82 points or 0.4 percent to 6,072.55 and the S&P 500 edged down 3.04 points or 0.1 percent to 2,388.13.
The mixed close by the major averages came following the Federal Reserve’s widely expected decision to leave interest rates unchanged.
After a two-day meeting, the Fed said it decided to maintain the target range for the federal funds rate at $0.75 to 1 percent.
The accompanying statement said recent data indicates that the labor market has continued to strengthen even as growth in economic activity slowed.
The Fed said it views the slowing in economic growth during the first quarter as likely to be transitory and called the near-term risks to the economic outlook roughly balanced.
The central bank also reiterated that it expects economic conditions will evolve in a manner that will warrant gradual increases in interest rates.
Earlier in the day, some negative sentiment was generated in reaction to quarterly results from tech giant Apple (AAPL), which reported better than expected second quarter earnings but weaker than expected revenues and iPhone shipments.
Apple also announced a 10.5 percent increase to its quarterly dividend and a $35 billion addition to its stock buyback program.
On the economic front, payroll processor ADP released a report showing that private sector employment increased roughly in line with economist estimates in the month of April.
ADP said private sector employment climbed by 177,000 jobs in April after surging up by a revised 255,000 in March.
Economists had expected employment to increase by 175,000 jobs compared to the jump of 263,000 jobs originally reported for the previous month.
A separate report from the Institute for Supply Management showed that activity in the service sector grew at a faster than expected rate in the month of April.
The ISM said its non-manufacturing index rose to 57.5 in April from 55.2 in March, with a reading above 50 indicating growth in the service sector. Economists had expected the index to inch up to 55.8.
Steel stocks showed a substantial move to the downside on the day, dragging the NYSE Arca Steel Index down by 3.2 percent.
Allegheny Technologies (ATI), Ryerson (RYI), and Olympic Steel (ZEUS) turned in some of the steel sector’s worst performances.
Considerable weakness was also visible among telecom stocks, as reflected by the 3.1 percent slump by the NYSE Arca North American Telecom Index. The index tumbled to its lowest closing level in a month.
Frontier Communications (FTR) fell sharply after reporting a wider than expected first quarter loss and cutting its quarterly dividend.
Commercial real estate and chemical stocks also saw notable weakness on the day, while some strength emerged among banking stocks.
