Shares are set to open modestly lower after a rebound in key commodities took the edge off a second losing night on Wall Street as earnings and economic data disappointed.
The June SPI 200 futures contract eased 12 points or 0.3% to 4920 as Rio Tinto rallied in US trade and oil, gold and copper trimmed recent losses.
The S&P 500 dropped to a six-week low overnight after more earnings misses and soft economic figures. The index fell 10 points or 0.64% with tech stocks hit hardest and the defensive telecoms sector faring best. The Dow lost 82 points or 0.56% and the Nasdaq 1.21% for its worst two-day decline in five months as Apple pushed further below US$400 a share.
"We're seeing slowing demand and lacklustre economic data, which is causing analysts and economists to revise their growth outlooks for the year," a senior wealth strategist at Premier/First Allied Securities in the US told Reuters.
EBay and United Health became the latest big names to disappoint the market during the busiest night of the Q1 earnings season so far. EBay dived 5.85% and United Health lost 3.77%.
An index of leading economic indicators declined for the first time in seven months, confirming the recent deterioration in US economic data. The Conference Board's LEI, which predicts economic activity three to nine months ahead, dipped 0.1% last month. Claims for jobless benefits increased by 4,000 last week to 352,000 and a gauge of manufacturing activity in the greater Philadelphia region eased to 1.3 this month from 2 in March.
"We've come to a period of negative economic surprises," the chief investment strategist at Janey Montgomery Scott in the US told Bloomberg. "Whether it's a pullback or a corrective phase, I think it'll just be a pause because I don't think the fundamental underpinnings are deteriorating more."
Rio Tinto recouped some of Wednesday's heavy fall, rising 1.27% in US trade. BHP dipped in and out of positive territory before closing 0.11% in the red.
Gold settled at its highest level of the week as bargain hunting continued. Gold for June delivery was recently ahead $4.70 or 0.3% at US$1,387.40 an ounce. May silver fell another seven cents or 0.3% to US$23.24 an ounce.
Copper settled below US$7,000 a metric ton in London for the first time since 2011, but recovered in US trade. US copper for May delivery was recently up a cent or 0.4% at US$3.20 a pound. In London, copper settled at US$6,985. [Apologies: unable to locate closing prices for the other base metals.]
A falling US dollar helped oil claw back above US$88 a barrel, despite the recent run of soft US economic news. West Texas intermediate crude for May delivery rallied $1.63 or 1.9% to US$88.31 a barrel.
European markets closed little changed after a pan-European index fell to its lowest level of the year on Wednesday. Germany's DAX lost 0.39% and France's CAC was near break-even at -0.01%. Britain's FTSE closed unchanged.
TRADING THEMES TODAY
SOFT END TO A SOFT WEEK: There were hopeful signs in commodity markets overnight, but Wall Street offered little else to justify an ASX rebound today. Still, yesterday's resource share rout appeared overdone, so we may see some bargain hunting at that end of the market, perhaps offset by weakness elsewhere. Precious metals miners rallied 2.9% in the US and oil services shares gained 1.16%. NEA's performance yesterday demonstrated that there is still life in the speccies. Microsoft, IBM and Google have all reported results in the hour since Wall Street closed. The reaction so far suggests two hits and one miss, which may be just enough to push US futures higher and improve the outlook for our market.
ECONOMIC NEWS: No significant domestic news scheduled today. China releases a leading index of economic indicators at noon EST. Corporate earnings dominate the outlook in the US tonight, with no significant economic data scheduled for release. The G20 and IMF meet this weekend.
