By Victor Reklaitis and Mark DeCambre, MarketWatch
'This is beginning to look a little too frothy for our liking,'
says Bank of America Merrill Lynch strategist
U.S. stocks opened firmly higher on Thursday, putting the Dow
Jones Industrial Average on course for another record.
Meanwhile, the European Central Bank left its monetary policy
unchanged, as expected, with Wall Street focusing mostly on a wave
of earnings from a number of blue-chip companies.
What are the main benchmarks doing?
The Dow rose 120 points, or 0.5%, to 26,369, while the S&P
500 index climbed 9 points, or 0.3%, to 2,846. The Nasdaq Composite
Index gained 39 points, or 0.5%, at 7,456.
On Wednesday, the Dow rose 0.2% to a record close
(http://www.marketwatch.com/story/dow-futures-rise-as-market-rally-shows-no-sign-of-abatement-2018-01-24),
while the S&P 500 finished 0.1% lower and the Nasdaq Composite
lost 0.6%.
The three equity gauges are up between 6.1% and 7.4% so far in
2018, adding to last year's sizable gains as investors cheer the
expanding U.S. economy and growth in corporate profits.
What's driving markets?
Improved earnings from corporations so far as been the impetus
for rising stock-market values.
The European Central Bank, as expected, left interest rates
unchanged
(http://www.marketwatch.com/story/ecb-leaves-monetary-policy-unchanged-2018-01-25)
on Thursday and repeated that it expects to keep interest rates at
present levels for an "extended period" and "well past" the end of
its asset purchase program, which is due to expire in September.
Investors will focus on the ECB's news conference set for 8:30 a.m.
Eastern Time.
Follow:ECB live: How will Draghi handle a surging euro?
(http://www.marketwatch.com/story/ecb-live-how-will-draghi-handle-a-surging-euro-2018-01-25)
Meanwhile, Treasury Secretary Steven Mnuchin said on Thursday at
the World Economic Forum in Davos, Switzerland that the U.S. dollar
"is not a concern of mine," noting that "in the longer term, we
fundamentally in the strength of the dollar." The remarks made
during a panel discussion at the forum were an attempt to walk back
comments the Treasury secretary made a day ago, which implied that
he preferred a weaker dollar.
What are strategists saying?
"While we remain bullish for the year as a whole, this is
beginning to look a little too frothy for our liking," said James
Barty, a Bank of America Merrill Lynch strategist, in a note on
Thursday.
U.S. stock indexes and global benchmarks have been "fast out of
the blocks" in the new year, Barty said.
"Could equity markets melt up? Possibly," he added. "But
additional shorter-term hedges make a lot of sense when things are
as frothy as this."
Which stocks look like key movers?
3M Co.(MMM) shares were rising after the manufacturer reported
fourth-quarter results that were better than expected on an
adjusted basis and increased its quarterly dividend by 16% to $1.36
a share. Shares were up 2.9%.
Caterpillar Inc. shares (CAT) rose 3.5%
(http://www.marketwatch.com/story/caterpillar-shares-jump-3-as-earnings-and-guidance-top-estimates-2018-01-25)Thursday,
after the company reported better-than-expected earnings for the
fourth quarter and offered upbeat guidance for 2018.
Celgene Corp.'s stock(CELG) added 1.7% before the bell after the
biopharmaceutical company reported a fourth-quarter profit
(http://www.marketwatch.com/story/celgenes-stock-gains-after-profit-beats-expectations-2018-01-25)
that rose above expectations. The company swung to a net loss of
$81 million, or 10 cents a share, in the quarter to Dec. 31, from a
profit of $429 million, or 53 cents a share, in the same period a
year ago.
Shares of American Airlines Group Inc.(AAL) retreated 0.7% on
Thursday after the company reported fourth-quarter earnings
(http://www.marketwatch.com/story/american-airlines-reports-q4-earnings-ahead-of-wall-street-forecasts-2018-01-25)
that were above Wall Street expectations.
Facebook Inc.'s stock (FB)rose 0.8% action, looking by reports
that U.K. Prime Minister Theresa May plans to blast
(http://www.independent.co.uk/news/uk/politics/theresa-may-davos-speech-facebook-twitter-terrorist-propaganda-donald-trump-a8176281.html)
social media companies again for providing platforms to terrorists,
child abusers and slave traders. May, who is expected to make these
remarks at the World Economic Forum in Davos, Switzerland, has
previously criticized
(https://news.sky.com/story/tension-between-theresa-may-and-facebook-over-extremism-online-10904140)
such companies along these lines.
Ford Motor Co.'s stock (F)looks set for a down day, off 1%,
after the car maker late Wednesday reported disappointing
fourth-quarter results and reiterated a bleak outlook
(http://www.marketwatch.com/story/fords-bleak-outlook-worsened-by-outside-factors-2018-01-24).
(http://www.marketwatch.com/story/fords-bleak-outlook-worsened-by-outside-factors-2018-01-24)Amazon.com
Inc. shares (AMZN) are up 1% in premarket trading Thursday after an
analyst at DA Davidson raised his price target on the stock to
$1,800.
Home Depot Inc. (HD) said it would pay one-time $1,000 bonuses
for U.S. hourly associates following corporate tax cuts. Shares for
the home-improvement retailer were little changed.
Freeport-McMoRan Inc. shares (FCX) jumped 4.7% premarket
Thursday, after the mining and metals company posted
better-than-expected
(http://www.marketwatch.com/story/freeport-mcmoran-shares-jump-3-premarket-after-earnings-beat-2018-01-25)
fourth-quarter earnings.
Kroger Co. shares (KR) are up 3.6% in Thursday premarket trading
after reports that the grocer is in talks to join wi
(http://www.marketwatch.com/story/kroger-shares-jump-on-reports-of-alibaba-partnership-2018-01-25)th
online retailer Alibaba Group Holding Ltd. (BABA).
Intel Corp. (INTC)and Starbucks Corp.(SBUX)are expected to
report results after the close.
What are other assets doing?
European stocks
(http://www.marketwatch.com/story/european-stocks-fall-to-1-week-low-as-all-eyes-on-ecb-2018-01-25)were
little changed as traders braced for fresh policy signals from the
European Central Bank, while most Asian markets closed lower. Gold
futures and oil futures were gaining, and the ICE U.S. Dollar Index
was extending its recent drop
(http://www.marketwatch.com/story/dollar-falls-further-as-mnuchin-defends-weak-buck-comments-2018-01-25)
that has taken it to three-year lows.
What economic data could help drive markets?
Initial U.S. jobless claims rose by 17,000 to 233,000
(http://www.marketwatch.com/story/us-jobless-claims-rise-one-week-after-dropping-to-45-year-low-2018-01-25)in
the seven days ended Jan. 20., below the 240,000 forecast of
economists polled by MarketWatch.
Check out:MarketWatch's Economic Calendar
(http://www.marketwatch.com/economy-politics/calendars/economic)
At 10 a.m. Eastern, investors are due to get December data on
new home sales and leading economic indicators. Economists predict
680,000 homes were sold.
(END) Dow Jones Newswires
January 25, 2018 09:54 ET (14:54 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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