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Aug 4, 2016

U.S. Stock Market Indications, by MarketWatch - August 4, 2016: Wall Street to Look For Cues From Oil Prices, Bank of England's Policy Problem

Barbara Kollmeyer

U.S. stock futures held steady in early trading on Thursday, with investors keeping a close eye on oil prices and possibly the first interest-rate cut in seven years from the United Kingdom’s Bank of England.

Dow Jones Industrial Average futures YMU6, +0.05%  rose 4 points to 18,273, while those for the S&P 500 index ESU6, +0.03%  were flat at 2,157. Nasdaq-100 NQU6, -0.11%  futures dipped 7.25 points to 4,721.
The Dow industrials DJIA, +0.23%  broke a seven-session losing streak on Wednesday, rising 41.23 points, or 0.2%, to 18,355, thanks to a rally in oil prices. Analysts said, however, that stocks are trading in narrow ranges owing to the typical summer market atmosphere.
Crude oil prices CLU6, -0.54%   bounced around on Thursday, dipping 11 cents to $40.73 a barrel, with analysts keeping a close eye on the $41-a-barrel level. The Energy Information Administration data reported a surprise 3.3 million-barrel fall in gasoline inventories, which helped U.S. crude rally to $40.83 a barrel on Wednesday.
“Oil has once again established itself as the central thematic behind the world’s financial markets and the fact we saw such a powerful reversal at the trend low, despite U.S. dollar strength, has driven a slight uplift in sentiment,” said Chris Weston, chief market strategist at IG, in a note.
Markets will now be looking to see “follow through buying to suggest the recent move lower in the barrel is over and consolidation is likely,” he said.
Bank of England in the hot seat: Central banks will be back in focus for Thursday, with the Bank of England’s Monetary Policy Committee overwhelmingly expected to vote for the first interest-rate cut in that country in seven years.
The British pound GBPUSD, -0.0450%  was trading lower ahead of that decision, at $1.3295 from $1.3325 late Wednesday. The dollar was moderately higher against major crosses DXY, +0.16%  , according to the ICE U.S. Dollar Index.
Read: Record short trades set sterling up for post-BOE rally
BOE policy makers are expected to release their decision, minutes and quarterly inflation report at 12 p.m. London time, or 7 a.m. Eastern Time, followed by a press conference with the bank’s Gov. Mark Carney at 7:30 a.m. Eastern. The FTSE 100 UKX, +0.12%  wobbled ahead of that decision.
In the U.S., weekly jobless claims are coming at 8:30 a.m. Eastern, followed by factory orders at 10 a.m. Eastern. Claims data comes a day ahead of the July nonfarm payrolls report. Economists polled by MarketWatch expect jobs growth of 185,000 after 287,000 jobs were created in June.
Stocks to watch: Ahead of the open, Restaurant Brands International QSR, +0.65%  , Viacom Inc. VIAB, +0.78%  , Priceline Group Inc. PCLN, +1.91%  , SeaWorld Entertainment Inc. SEAS, +3.27%  and Kellogg Co. K, -0.96% are all due to report.
Tesla Motors Inc. TSLA, -0.62%  shares could be active after the electric-car maker’s reported a bigger-than-expected second-quarter loss, and the company promised 50,000 car deliveries in the second half of the year.
Read: Elon Musk: Tesla is not really a money-losing business
GoDaddy Inc. GDDY, -3.51%  could add to a 7% late-session bump after the seller of web addresses posted a narrower quarterly loss on a revenue jump.
Digital payments company Square Inc. SQ, +3.88%  raised its revenue guidance for the year, sending shares up 9% in late trade.
Read: Square earnings give Jack Dorsey an actual growth story
Transocean Ltd.’s RIG, +3.98%  quarterly profit dropped sharply as revenue was nearly halved, but results beat expectations and shares of the oil driller rose in late trade. Herbalife Inc. HLF, +0.37%  swung to a second-quarter loss, but lifted its outlook and shares rose late Wednesday. TripAdvisor Inc. TRIP, +0.12%  missed targets as hotel revenue fell, sending shares down nearly 8% in late trade.
Meanwhile, Canadian Pacific Railway Ltd. CP, +0.42% could be in focus after Bill Ackman’s Pershing Square said it would sell its $1.42 billion stake in the company. Ackman will stay on the board until its next annual meeting.
Other markets: Asian markets ADOW, +0.57%  finished higher, inspired by gains for oil prices. In Europe, the Stoxx Europe 600 index SXXP, +0.45%  rose 0.4%, lifted by gains for banks.
Gold prices GCU6, -0.55%  dropped $7.10 or 0.5%, to $1,357.40 an ounce.