A weekly jobless claims report came in stronger than expected, confirming the Fed’s view that the economy is strengthening. Claims fell by 6,000 to 289,000, a low level typically associated with strong hiring. A Philadelphia Federal Reserve manufacturing survey and leading indicators for November are expected at 10 a.m. Eastern Time. See preview
Futures for the Dow Jones Industrial Average DJH5, +1.01% surged 190 points, or 1.1%, to 17,481, while those for the S&P 500 index SPH5, +1.30% jumped 22.70 points, or 1.1%, to 2,030.90. Futures for the Nasdaq-100 index NDH5, +1.43% climbed 54 points, or 1.3%, to 4,213.50.
Markets appeared to be picking where they left off on Wednesday, after the Federal Open Market Committee said it “can be patient” about the timing of its first rate hike, modifying the “considerable time” language. Buoyed as well by energy gains, the Dow industrials DJIA, +1.29% jumped 1.7% and the S&P 500 SPX, +1.29% surged 2% — the best one-day gains for both indexes in 2014. Why the Fed tries to be firm and flexible at the same time
Take it and run: “The truth is that you can take what you need from yesterday’s FOMC song and dance, but the key take-away for traders was that less-aggressive outlook for the Fed Funds rate forecast by FOMC members for the end of 2015 ....Take ‘em, and bid it,” said Stephen Guilfoyle, chief economist at Sarge986.com, in a note.
Speaking after the statement, Fed Chairwoman Janet Yellen warned markets not to expect the “measured pace” type of tightening seen from 2004 to 2006, saying the Fed’s moves will be data-dependent. Not all were convinced this marked a dovish tone.
We would speculate that the equity rally in the final hour of trading was more likely related to models-buying equities, as bonds sold off, than anything Chair Yellen said. She didn't push normalization out — if anything, she opened a window to do it sooner,” said Michael O’Rourke, chief market strategist with Jones Trading. Rate hikes, volatility not expected to kill bull market in 2015
Global markets picked up the baton, with an upbeat business-sentiment survey from Germany lending a hand and helping drive a 2% rally for the Stoxx Europe 600 index SXXP, +2.51% Asian stocks gained as well, with the Nikkei 225 index NIK, +2.32% surging more than 2%.
Overseas markets: The ruble USDRUB, -5.13% rose against the dollar after Russian President Vladimir Putin said during his annual public news conference that the currency will stabilize amid current economic headwinds. Putin also stressed that “external conditions” — referring to sanctions imposed by the West — were pushing Russia into reforms that would make the economy more efficient. The dollar was buying 61.99 rubles, compared with 62.51 late on Wednesday. See Putin gets Russia pumped for public appearance
Not all of Europe was on the rise. Greek stocks GD, +0.16% lost more than 1% after Prime Minister Antonis Samaras failed to get enough support for his nominee in a parliamentary vote for a new head of state. If Samaras repeats that failure in the second and third round of voting, snap elections look set to take place in Greece in early 2015.
The dollar USDJPY, +0.49% pushed lower against the yen on the heels of heavy post-FOMC meeting gains. Commodities got a tailwind from gains for stocks, with U.S. crude CLF5, +1.06% up 1.7%, Brent crude LCOH5, +1.62% soaring 5%, and gold prices GCG5, +0.90% pressing above $1,200 an ounce.
Stocks in focus: Accenture PLC ACN, +5.37% rose in premarket trade after the management consulting company reported better-than-expected fiscal first-quarter results.
Rite Aid Corp. RAD, +13.70% shares jumped after the drugstore boosted its guidance for the year after posting better-than-expected sales and earnings growth in its November quarter.
Shares of Sony Corp. SNE, +3.68% could be active after Sony Pictures said it was pulling its planned Christmas debut of “The Interview”, after terrorist threats against theaters showing the movie. U.S. investors said they believe North Korea is behind the recent hack on Sony’s computer systems, said media reports.
Dunkin’ Brands Group Inc. DNKN, -7.71% , shares slumped after it lowered a key 2014 sales target Thursday and issued disappointing earnings guidance for next year.
Shares in Pantry Inc. PTRY, +2.45% soared, after Alimentation Couche-Tard Inc. agreed to buy the convenience-store chain for about $860 million. The companies valued the deal at about $1.7 billion, including the assumption of debt, and it is expected to close in the first half of next year.
Oracle Corp. ORCL, +7.09% jumped 5.1% in premarket trade after the software company late Wednesday reported better-than-expected first-quarter profit and sales and an upbeat outlook. Similar upbeat news from Jabil Circuit Inc. JBL, +3.54% also lifted those shares.
