Small caps to open in the green
Small-cap stocks are expected to open in the green Thursday, lifted by an oversold bounce posted in overnight action. The Russell 2000 (NYSE:IWM) was up about 0.4% in after-hours trading, which would translate to a cash opening near 719.
Short-term momentum readings were overdone on the downside by Wednesday’s harsh decline, and day traders who caught the move could be quick to pocket profits. In addition, several retailer stocks appear to be on solid footing to start the day after Wal-Mart (NYSE:WMT) and Costco (Nasdaq:COST) posted decent sales. What’s more, the weekly chain store sales report rose 1.4% versus the same week from last year, and the numbers overall were better than expected. Crox Inc. (Nasdaq:CROX) shot up some 16% in overnight trading, as investors overlooked a first quarter loss to embrace the plastic shoe maker’s rosy Q2 and yearly outlook.
Overseas equities markets were flat to lower, with European shares hovering near steady levels moving toward the U.S. opening. Asia shares were on the defensive, with Japan’s Nikkei down 1.1%, Hong Kong’s Hang Seng down 0.6% and Singapore shares down 1.7%.
The dollar was up again this morning against the euro, rising about 0.3% to the highest level since mid-March, which could provide some support to the stock market. Crude oil was off a tad early today after soaring to record highs Wednesday, but bullish enthusiasm in energy markets is high and rising prices remain a major threat to U.S. consumers.
The weekly claims report released this morning at 8:30 a.m. ET was a little better than expected, with the headline number at 365,000 versus the forecast of 375,000. The market was little changed after the data hit the wires.
Looking ahead, the market is still keying on earnings results expected today from American International Group (NYSE:AIG), especially after financial shares took a hit during Wednesday’s slide.
