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Dow futures pare gains after BoE unexpectedly holds rates steady

Published 07/14/2016, 07:14 AM
© Reuters.  Dow futures pare gains after BoE unexpectedly holds rates steady
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Investing.com - U.S. stock markets pointed to sharp gains at the open on Thursday, with the Dow and S&P 500 on track to open at new all-time highs, though indices pulled back from the strongest levels of the session after the Bank of England kept its benchmark interest rate unchanged.

The blue-chip Dow futures jumped 102 points, or 0.56%, by 11:12GMT, or 7:12AM ET, after being up by more than 150 points earlier. The S&P 500 futures rose 11 points, or 0.5%, while the tech-heavy Nasdaq 100 futures added 20 points, or 0.42%.

Despite market expectations for a rate cut, the Bank of England decided to leave rates unchanged at 0.5%. Out of the nine Monetary Policy Committee members, only one policymaker voted in favor of a rate cut, while the remaining eight decided to leave it unchanged.

The central bank also said it was to maintain the stock of asset purchases financed by the issuance of central bank reserves at £375 billion.

Following the news, the pound soared nearly 2% against the U.S. dollar (GBP/USD), while U.K. and European stocks pared gains.

Meanwhile, in the U.S., weekly jobless claims and PPI inflation data are both due at 12:30GMT, or 8:30AM ET.

Besides the data, market players awaited comments from a few Fed officials later in the session to judge the balance of opinion among policymakers on the prospect of further rate hikes.

Atlanta Fed President Dennis Lockhart will speak at 15:15GMT, or 11:15AM ET, Kansas City Fed President Esther George is scheduled to deliver comments at 17:15GMT, or 1:15PM ET, and Dallas Fed President Rob Kaplan is due to speak after the closing bell at 7:00PM ET.

In earnings news, JPMorgan Chase & Co (NYSE:JPM) saw shares rise more than 2% in pre-market trade after the largest U.S. bank reported stronger-than-expected second quarter earnings and revenue.

BlackRock Inc (NYSE:BLK) eased slightly after the world's largest asset manager, reported a 3.7% fall in quarterly profit, reflecting a turbulent quarter for financial markets.

Meanwhile, Yum! Brands (NYSE:YUM) saw shares climb more than 4% ahead of the open after the restaurant group reported second quarter China sales that matched Wall Street expectations after Wednesday's closing bell.

In the currency market, the yen sank to a three-week low against the dollar amid reports that former Federal Reserve chair Ben Bernanke had raised the prospect of “perpetual bonds” for the Bank of Japan.

Elsewhere, oil prices regained ground on Thursday, after plunging more than 4% in the prior session after bearish U.S. inventory data heightened concerns about a global glut.

U.S. crude was up 41 cents, or 0.9%, to $45.16 a barrel, while Brent tacked on 48 cents, or 1.02%, to $46.73.

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