TradeMaster Daily Stock Alerts Blog

Small-cap stocks are expected to open modestly higher, underpinned by a dip in bank lending rates and tame economic data. Stock index futures were up about 1% ahead of the opening, which suggests a Russell 2000 (NYSE:IWM) open near 507, a welcome sign of early stability following Wednesday’s huge rout.

As for the economic data today, the weekly claims report came in at 461,000, which was below the forecast of 470,000. However, the rate on continuing claims was at 3.71 million and the four-week moving average on claims was at 489,250, which was the highest level in seven years.

The second leg of inflation data this week, the Consumer Price Index (CPI) came in at 0.0%, which was slightly better than the forecast for a rise of 0.1%. The ease on consumer prices came in a day after wholesale prices (PPI) were in line with expectations at -0.4%. There are still more data moguls to traverse this morning, with Industrial Production data out at 9:15 a.m. ET, while the Philly Fed survey is slated for release at 10:00 a.m. ET.

Stock index futures extended gains after the tame claims and CPI reports, while the U.S. dollar rose against the yen. Even before the data rush this morning, stock index futures were showing mild upside strength, underpinned by a decline in inter-bank lending rates during European trading hours.

Stock markets around the world took a beating overnight, catching up with the historic collapse in U.S. markets on Wednesday. In Japan, the Nikkei tumbled 11%, the largest one-day loss in more than a decade. Elsewhere on the planet, Europe’s FTSE 300 was off almost 6% at the overnight lows, but trimmed those losses down ahead of the U.S. open. South Korea stocks were down 9%, Singapore was off 5%, Malaysia was off 3.3%, Vietnam down 3.2%, Indonesia down 4.6% and Thailand off 1.5%.

On the earnings front today, Citigroup Inc. (NYSE:C), the nation’s largest bank, posted a loss of 60 cents a share, which was better than the forecast for a loss of 70 cents. C shares were up just slightly in pre-market trading. Also on the financial earnings scene, Merrill Lynch & Co. Inc. reported a loss of $7.5 billion, or $5.58 a share, worse than the projection for a loss of $5.18 a share.

Looking at the chart picture, the market remains in the clutches of a steep bear market after a violent upside correction on Friday and Monday. As the Russell approaches logical figure support at 500, the next short-term support lines come in at 492, 484 and 475. On the upside, resistance for today’s action is pegged at 514 and 525.

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