U.S. stocks gain on improving U.S. jobs, factory data; Dow rises 0.83%

U.S. stocks rose on Thursday after weekly jobless claims came in less than expected while a key manufacturing barometer beat market forecasts.

At the close of U.S. trading, the Dow Jones Industrial Average finished up 0.83%, the S&P 500 index rose 1.25%, while the Nasdaq Composite index rose 1.36%.

In the U.S. earlier, the Institute for Supply Management said its widely-watched purchasing managers index rose to 55.4 in July from 50.9 in June, expanding at its fastest rate since April 2011 and well above market forecasts for a 52.0 reading. 

Elsewhere, the Department of Labor said the number of individuals filing for initial jobless benefits in the week ending July 26 fell by 19,000 to 326,000. 

Analysts were expecting jobless claims to come in at 345,000. 

Stocks rallied on the data, which pointed to a U.S. economy that may be speeding up its recovery from the 2008 financial crisis and years of sluggish growth afterwards.

The data fueled expectations that the Federal Reserve may wind down stimulus measures in the near future, which are bullish for stocks by design, though any decision to do so should herald the arrival of better days for the U.S. economy, which would also be bullish for stocks.

Leading Dow Jones Industrial Average performers included American Express, up 2.48%, Bank of America, up 2.33%, and Hewlett-Packard, up 2.18%.

The Dow Jones Industrial Average's worst performers included Exxon, down 1.13%, Intel, down 0.60%, and Microsoft, down 0.53%.

European indices, meanwhile, finished higher.

After the close of European trade, the EURO STOXX 50 rose 1.26%, France's CAC 40 rose 1.25%, while Germany's DAX 30 finished up 1.63%. Meanwhile, in the U.K. the FTSE 100 finished up 0.92%.

On Friday, the Bureau of Labor Statistics will release its July jobs report, a major indicator of U.S. recovery.

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Forex - Dollar gains on solid U.S. factory data, falling jobless claims

The dollar firmed against most major currencies on Thursday after data released earlier revealed that jobless claims are on the decline in the U.S., while factory output is on the rise in the world's largest economy.

Solid indicators in the U.S. often strengthen the greenback by fueling expectations that the Federal Reserve is moving closer to tapering and eventually ending monetary stimulus programs such as monthly asset purchases that weaken the dollar to spur recovery.

In U.S. trading on Thursday, EUR/USD was down 0.74% at 1.3203.

In the U.S. earlier, the Institute for Supply Management said its widely-watched purchasing managers index rose to 55.4 in July from 50.9 in June, expanding at its fastest rate since April 2011 and well above market forecasts for a 52.0 reading. 

The numbers strengthened the greenback by building expectations that the Federal Reserve remains on track to winding down stimulus measures such as its USD85 billion-a-month bond-buying program, which weakens the greenback to speed up recovery.

Better-than-expected data out of the labor market also fueled ongoing sentiments that extraordinary monetary stimulus programs will begin to wind down possibly this year and end in 2014.

The Department of Labor said the number of individuals filing for initial jobless benefits in the week ending July 26 fell by 19,000 to 326,000. 

Analysts were expecting jobless claims to come in at 345,000. 

Meanwhile, the euro came under pressure after ECB President Mario Draghi said that the central bank’s monetary policy will remain accommodative "for an extended period of time."

The ECB held its benchmark interest rate at a record low 0.50% in August, in line with expectations. 

Elsewhere in Europe, London-based Markit said the euro zone's manufacturing PMI rose to 50.3 in July, from a reading of 50.1 the previous month. Analysts had expected the index to remain unchanged last month.  

The greenback, meanwhile, was up against the pound, with GBP/USDtrading down 0.58% at 1.5120.

The Bank of England earlier left interest rates unchanged at a record low 0.5% and left the size of its asset-purchasing program unchanged at GBP375 billion.

The dollar was up against the yen, with USD/JPY up 1.71% at 99.57, and up against the Swiss franc, with USD/CHF trading up 1.11% at 0.9364.

The dollar was up against its cousins in Canada, Australia and New Zealand, with USD/CAD up 0.71% at 1.0350, AUD/USD down 0.70% at 0.8922 and NZD/USD trading down 1.43% at 0.7872.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.87% at 82.46.

On Friday, the Bureau of Labor Statistics will release its July jobs report, a major indicator of U.S. recovery.

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Forex - GBP/USD slips on strengthening U.S. jobs, factory data

The pound moved lower against the dollar on Thursday on news that U.S. jobless claims came in much lower than expected last week, while separate data revealed that factory activity is on the rise in the world's largest economy.

Solid indicators in the U.S. often strengthen the greenback by fueling expectations that the Federal Reserve is moving closer to tapering and eventually ending monetary stimulus programs such as monthly asset purchases that weaken the dollar to spur recovery.

In U.S. trading on Thursday, GBP/USD was trading at 1.5134, down 0.49%, up from a session low of 1.5110 and off from a high of 1.5254.

Cable was likely to find support at 1.5028, the low from July 15, and resistance at 1.5413, Monday's high.

In the U.S. earlier, the Institute of Supply Management said its widely-watched purchasing managers index rose to 55.4 in July from 50.9 in June, expanding at its fastest rate since April of 2011 and well above market forecasts for a 52.0 reading. 

The numbers strengthened the greenback by keeping expectations alive that the Federal Reserve remains on track to winding down stimulus measures such as its USD85 billion-a-month bond-buying program, which weakens the greenback to speed up recovery.

Better-than-expected data out of the labor market also fueled ongoing sentiments that special monetary stimulus programs will begin to wind down possibly this year and end in 2014.

The Department of Labor said the number of individuals filing for initial jobless benefits in the week ending July 26 fell by 19,000 to 326,000. 

Analysts were expecting jobless claims to come in at 345,000. 

Meanwhile in the U.K., the Bank of England earlier left interest rates unchanged at a record low 0.5% and left the size of its asset-purchasing program unchanged at GBP375 billion.

The pound, meanwhile, was up against the euro and up against the yen, with EUR/GBP down 0.13% at 0.8734 and GBP/JPY up 1.07% at 152.87.
   

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Crude soars on strong U.S. jobs and factory reports

U.S. crude oil prices soared on Thursday after better-than-expected factory and jobs reports hit the wire in the U.S. earlier, while improving Chinese output figures bolstered prices as well.

On the New York Mercantile Exchange, light sweet crude futures for delivery in September traded at USD107.48 a barrel during U.S. trading, up 2.33%. 

The September contract settled up 1.89% at USD105.03 a barrel on Wednesday.

In the U.S. earlier, the Institute of Supply Management said its widely-watched purchasing managers index rose to 55.4 in July from 50.9 in June, expanding at its fastest rate since April 2011 and well above market forecasts for a 52.0 reading. 

Separately, the Department of Labor said the number of individuals filing for initial jobless benefits in the week ending July 26 fell by 19,000 to 326,000. 

Analysts were expecting jobless claims to come in at 345,000. 

The numbers, the latest in a series of indicators that have beat expectations, painted a picture of a U.S. recovery that is gaining steam and will demand more oil and fuels going forward.

Improving manufacturing barometers outside of the U.S. fueled the rally as well.

London-based Markit reported earlier that the euro zone's manufacturing PMI rose to 50.3 in July, from a reading of 50.1 the previous month. Analysts had expected the index to remain unchanged last month.  

Meanwhile in China, a government report revealed that the country's manufacturing purchasing managers' index rose unexpectedly to 50.3 in July from 50.1 in June, beating expectations for a dip to 49.1.

A reading above 50.0 indicates industry expansion and below indicates contraction.

China is the world's second largest oil consumer after the U.S. 

On the ICE Futures Exchange, Brent oil futures for September delivery were up 1.43% at USD109.24 a barrel, up USD1.76 from its U.S. counterpart.

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Gold slides on solid U.S. jobs and factory reports

Gold prices softened on Thursday after better-than-expected U.S. reports on jobless claims and factory activity boosted hopes that the U.S. economy is on the mend and will no longer require the support of Federal Reserve stimulus measures.

Monetary stimulus programs, such as the Fed's monthly asset purchases totaling USD85 billion, drive down longer-term interest rates to spur recovery, which weakens the dollar and makes gold an attractive hedge.

Talk of an eventual end to stimulus tends to strengthen the dollar, which often comes at gold's expense.

On the Comex division of the New York Mercantile Exchange, gold futures for December delivery traded at USD1,311.15 during U.S. afternoon hours, down 0.14%.

The December contract settled down 0.89% at USD1,313.00 a troy ounce on Wednesday.

Gold futures were likely to find support at USD1,306.05 a troy ounce, Wednesday's low, and resistance at USD1,339.15, Wednesday's high.

In the U.S. earlier, the Institute of Supply Management said its widely-watched purchasing managers index rose to 55.4 in July from 50.9 in June, expanding at its fastest rate since April 2011 and well above market forecasts for a 52.0 reading. 

The numbers strengthened the greenback by keeping expectations alive that the Federal Reserve remains on track to winding down stimulus measures beginning this year and ending them next year and let the economy stand on its own two feet.

Better-than-expected data out of the labor market also fueled such sentiments.

The Department of Labor said the number of individuals filing for initial jobless benefits in the week ending July 26 fell by 19,000 to 326,000. 

Analysts were expecting jobless claims to come in at 345,000. 

Meanwhile, gold did see some support after ECB President Mario Draghi said that the central bank’s monetary policy will remain accommodative "for an extended period of time."

The ECB held its benchmark interest rate at a record low 0.50% in August, in line with expectations, which made gold attractive in the eyes of those concerned with the single currency's strength. 

Elsewhere on the Comex, silver for September delivery was down 0.08% at USD19.612 a troy ounce, while copper for September delivery was up 1.57% and trading at USD3.168 a pound.

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European stocks extend gains ahead of ECB, Draghi; Dax up 1.2%

European stocks extended gains on Thursday, after data indicated that the slump in the euro zone’s manufacturing sector is easing.

Market players now looked ahead to the European Central Bank's upcoming policy statement due later in the day, as well as ECB President Mario Draghi's traditional press conference.

During European afternoon trade, the EURO STOXX 50 rose 0.8%, France’s CAC 40 added 0.5%, while Germany’s DAX 30 rallied 1.2%. 

Data released earlier showed that July’s euro zone manufacturing purchasing managers’ index improved to a two-year high of 50.3 from 48.8 in June.

Germany’s manufacturing PMI was revised up to an 18-month high of 50.7 in July from a final reading of 48.6 in June and above the preliminary reading of 50.3.

Appetite for riskier assets was also boosted after the Federal Reserve on Wednesday gave no indications on whether it will begin to taper its stimulus program in the near future.

The U.S. central bank said that it would keep buying USD85 billion a month in mortgage and Treasury securities and added that the pace of economic growth is "modest".

Sentiment was also buoyed following the release of stronger-than-expected data on Chinese factory activity.

A government report released earlier in the session showed that China’s manufacturing purchasing managers' index rose unexpectedly to 50.3 in July from 50.1 in June.

A reading above 50.0 indicates industry expansion, below indicates contraction.

In earnings news, French lender Societe Generale saw shares rally almost 9% after saying second quarter profit more than doubled. 

The upbeat results boosted other shares in the sector, with BNP Paribas rising 1.4%, Deutsche Bank climbing 1.1%, while Italian lender Unicredit tacked on 2.2%.

Meanwhile, German retailer Metro surged 7.5% after reporting second quarter earnings of EUR276 million, above expectations for EUR269.2 million.

On the downside, French drugmaker Sanofi saw shares drop 5.7% after the firm cut its 2013 profit estimate.    

Meanwhile, in London, FTSE 100 swung between modest gains and losses after the Bank of England announced no changes to monetary policy following its policy-setting meeting.

The BoE left interest rates on hold at a record low 0.5% and kept the size of its asset purchase program unchanged at GBP375 billion.

The decision came after Markit said the U.K. manufacturing purchasing managers' index rose to a 28-month high of 54.6 last month, from a reading of 52.9 in June. 

Lloyds Banking Group saw shares rally 8.3% after reporting its first profitable six-month period in three years. 

On the downside, oil producer Royal Dutch Shell fell 5% after posting a larger-than-expected drop in second quarter profit. 

In the U.S., equity markets pointed to a higher open after the Fed gave no hint of plans to taper its USD85 billion-a-month in asset purchases.

The Dow Jones Industrial Average futures pointed to a gain of 0.7%, S&P 500 futures signaled a 0.7% increase, while the Nasdaq 100 futures indicated a 0.7% advance. 

The U.S. was to publish official data on weekly unemployment claims, followed by a report by the Institute of Supply Management on manufacturing activity.

Market players also looked ahead to highly-anticipated data on U.S. nonfarm payrolls due on Friday for indications of how the recovery in the U.S. labor market is progressing.

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Proctor & Gamble beats on earnings, revenue

Consumer goods giant Proctor & Gamble reported better-than-expected second quarter earnings and revenue figures on Thursday, sending its shares higher in pre-market trade.

Earlier in the day, in its second quarter earnings report, Proctor & Gamble said earnings per share came in at USD0.79, above market forecasts for earnings of USD0.77 per share.

The company’s second quarter revenue totaled USD20.7 billion, beating expectations for revenue of USD20.5 billion.

P&G sees core EPS growth of 5% to 7% in 2014.

Following the release of the report, shares in Proctor & Gamble gained 1% in pre-market trade.

Meanwhile, the outlook for U.S. equity markets was upbeat. The Dow Jones Industrial Average futures indicated a gain of 0.7%, S&P 500 futures pointed to a rise of 0.7% and Nasdaq 100 futures indicated an increase of 0.7%.

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Forex - GBP/USD erases losses after BoE holds

The pound erased losses against the U.S. dollar on Thursday, as the Bank of England announced no changes to monetary policy following its policy-setting meeting, although the Federal Reserve's policy statement on Wednesday continued to support the greenback. 

GBP/USD pulled away from 1.5127, the session low, to hit 1.5235 during European afternoon trade, up 0.15%. 

Cable was likely to find support at 1.5079, the low of July 17 and resistance at 1.5354, the high of July 30. 

The BoE left interest rates on hold at a record low 0.5% and kept the size of its asset purchase program unchanged at GBP375 billion, at Governor Mark Carney's first meeting at the head of the central bank.

Mark Carney, formerly at the head of the Bank of Canada, replaced Mervyn King as Bank of England governor on July 1. 

The decision came after Markit said the U.K. manufacturing purchasing managers' index rose to 54.6 last month, from a reading of 52.9 in June. Analysts had expected the index to tick down to 52.8 in July. 

The greenback found support after the Fed on Wednesday said it would keep buying USD85 billion a month in mortgage and Treasury securities and added that the pace of economic growth is "modest". 

Market players were looking ahead to highly-anticipated data on U.S. nonfarm payrolls due on Friday for indications of how the recovery in the U.S. labor market is progressing. 

Sterling was higher against the euro with EUR/GBP retreating 0.64%, to hit 0.8690. 

Also Thursday, Markit said the euro zone's manufacturing PMI rose to 50.3 in July, from a reading of 50.1 the previous month. Analysts had expected the index to remain unchanged last month. 

But sentiment on the euro remained fragile ahead of the ECB's upcoming policy statement, as well as ECB President Mario Draghi's traditional press conference. 

Later in the day, the U.S. was to publish official data on weekly unemployment claims, followed by a report by the Institute of Supply Management on manufacturing activity.

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U.S. futures point to higher open after Fed; Dow Jones up 0.7%

U.S. stock futures pointed to a broadly higher open on Thursday, after the Federal Reserve gave no indications on whether it will begin to taper its bond buying program in the near future.

Stronger-than-expected data on manufacturing activity out of the euro zone and China further supported gains.

Ahead of the open, the Dow Jones Industrial Average futures pointed to a gain of 0.7% at the open, S&P 500 futures indicated an increase of 0.7%, while the Nasdaq 100 futures pointed to a 0.7% rise.

At the conclusion of its two-day policy meeting on Wednesday, the Fed said it would keep buying USD85 billion a month in mortgage and Treasury securities and added that the pace of economic growth is "modest".

In earnings news, Time Warner Cable shares could be active after the company reported second quarter earnings per shares of USD1.69, above market expectations for USD1.65.

Revenue during the period totaled USD5.55 billion, below forecasts of USD5.57 billion.

Other stocks likely to be in focus included Dow components Exxon Mobil and Proctor & Gamble, both scheduled to post results ahead of the opening bell.

Later in the day, the U.S. was to publish official data on weekly unemployment claims, followed by a report by the Institute of Supply Management on manufacturing activity.

Market players also looked ahead to highly-anticipated data on U.S. nonfarm payrolls due on Friday for indications of how the recovery in the U.S. labor market is progressing.

Across the Atlantic, European stock markets were higher, after data indicated that the slump in the euro zone’s manufacturing sector is easing.

The EURO STOXX 50 rose 0.7%, France’s CAC 40 added 0.4%, Germany's DAX edged rallied 1.1%, while Britain's FTSE 100 gained 0.3%. 

Data released earlier showed that July’s manufacturing purchasing managers’ index improved to a two-year high of 50.3 from 48.8 in June.

Germany’s manufacturing PMI was revised up to an 18-month high of 50.7 in July from a final reading of 48.6 in June  and above the preliminary reading of 50.3.

Elsewhere in Europe, the U.K. manufacturing PMI rose to 54.6 in July, the fastest rate of growth in 28 months.

Market players now looked ahead to policy decisions from the Bank of England and the European Central Bank later in the session.

During the Asian trading session, Hong Kong's Hang Seng Index rose 0.95%, while Japan’s Nikkei 225 Index surged 2.5% on the back of a slew of upbeat earnings reports.

Sentiment was also buoyed following the release of stronger-than-expected data on Chinese factory activity.

A government report released earlier in the session showed that China’s manufacturing purchasing managers' index rose unexpectedly to 50.3 in July from 50.1 in June.

A reading above 50.0 indicates industry expansion, below indicates contraction.

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