Business & Financial

Wall Street set to rise as volatility eases from record levels

Traders work on the floor of the NYSE in New York

Traders work on the floor of the New York Stock Exchange, (NYSE) in New York, U.S., February 6, 2018. REUTERS/Brendan McDermid

By Tanya Agrawal

(Reuters) – U.S. stocks looked set to open about half a percent higher on Thursday, as investors returned their focus to corporate results as volatility eased after hitting its highest level in more than two-and-a-half years earlier in the week.

By 8:32 a.m. ET (1332 GMT), Dow e-minis were up 111 points, or 0.45 percent, S&P 500 e-minis were up 13 points, or 0.49 percent.

Nasdaq 100 e-minis were up 51.75 points, or 0.79 percent, on volume of 79,385 contracts.

Wall Street ran out of steam on Wednesday after an early surge as investors were still cautious after a bruising selloff that saw the Dow Jones Industrial Average post its biggest intraday fall on record on Monday.

The market’s main gauge of volatility, the CBOE Volatility Index, fell to 26.74 on Thursday, still more than twice levels it held over the past few months. The index hit its highest level since August 2015 on Tuesday.

Investors are weighing whether the sharp swings are the start of a deeper correction or just a temporary bump in the nine-year bull market, spurred by concerns over rising interest rates and bond yields.

“While volatility in the markets has eased over the last couple of days, it has remained at very high levels – probably a sign of the ongoing nervousness among investors which may leave markets vulnerable to further declines,” Craig Erlam, senior market analyst at Oanda said in a note.

Dallas Fed President Robert Kaplan said on Thursday the central bank could hike rates three times this year and the recent market volatility in itself was not enough to change his base scenario.

Minneapolis Fed chief Neel Kashkari and Kansas City Fed President Esther George are expected to make appearances at different events later in the day.

The 10-year U.S. Treasury yield crept back to 2.83 percent, near Monday’s four-year peak of 2.885 percent.

Economic data showed weekly jobless claims fell to 221,000 below the 232,000 rise expected by economists, dropping to its lowest level in nearly 45 years as the labor market tightened further.

Among stocks, Twitter jumped 20.8 percent in premarket trading after it reported its first quarterly net profit and topped Wall Street targets as video ad sales rose.

Teva Pharmaceutical fell 10.5 percent after the world’s largest generic drugmaker forecast 2018 would be weaker than analysts estimate as the U.S. generics market continues to deteriorate.

Yelp fell 7.3 percent after a host of brokerages cut their price targets on the consumer review website operator’s stock following quarterly results.

Tyson Foods, rose 7.7 percent after the No. 1 U.S. meat processor, reported better-than-expected quarterly results.

(Reporting by Tanya Agrawal; Editing by Saumyadeb Chakrabarty)

 

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