A positive open is likely after a fall in US jobless claims to a three-month low helped Wall Street push further into record territory.
The March SPI 200 futures contract rose nine points or 0.2% to 5450 as BHP and Rio Tinto recorded solid overnight gains in US action and oil and most metals rallied.
The S&P 500 set a new all-time intraday high as strength in financials, materials and industrials propelled it to a closing gain of three points or 0.17%. The Dow added a more robust 62 points or 0.38%, while the Nasdaq lagged with a loss of 0.14% following a mid-session dip.
"Jobless claims falling to a three-month low sets us up for [tonight's] payrolls report," Chris Gaffney, senior market strategist at EverBank in the US, told MarketWatch. "Unless it comes dramatically lower, investors will shrug it off as the weather factor is already baked into expectations."
Claims for unemployment benefits dropped by 26,000 to 323,000 last week, the lowest number since late November. The decline raised hopes for tonight's jobs report, which had been dampened by the impact of one of the worst US winters in a decade.
Other economic news was less market-friendly. Factory orders declined by 0.7% in January, slightly more than the 0.6% fall tipped by economists. Productivity last quarter was revised downwards to an increase of 1.8% from an original estimate of 3.2%.
The financials sector rallied 0.8% to its highest level since September 2008. The Dow Jones Transportation Average, seen by many as an important measure of the strength of the US economy, continued to close the gap on the broader indexes, rising 0.94%.
A 0.5% rise in the materials sector helped BHP put on 0.87% and Rio Tinto 1.26% in US trade. Spot iron ore for import to China yesterday edged up 20 cents to US$116.90 a dry tonne.
The rumbling Ukrainian crisis ensured continuing interest in gold, a traditional hedge against geopolitical turmoil. Gold for April delivery was recently up $10.60 or 0.8% at US$1,350.90 an ounce after settling at US$1,345.80.
Oil also benefitted from developments in Ukraine, where the Crimean parliament voted to join the Russian Federation and hold a poll on leaving Ukraine. West Texas Intermediate crude oil for April delivery was lately ahead 53 cents or 0.5% at US$101.98 a barrel after settling at US$101.41.
Nickel claimed a fresh nine-month high, boosted by the possibility of trade sanctions against Russia, the world's second largest producer after Indonesia. In London, nickel rallied 1.5% and copper gained 0.1%. Aluminum, lead and tin also gained. Zinc declined. US copper for March delivery was recently up 0.4% or more than a cent at US$3.21 a pound.
European stocks pared gains after the European Central Bank's monthly meeting produced no new measures to stimulate the sluggish euro-zone economy. The Stoxx Europe 600 index advanced 0.07% as Germany's DAX put on 0.01%, France's CAC 0.59% and Britain's FTSE 0.19%.
TRADING THEMES TODAY
CLIMBING THE WALL OF WORRY: Wall Street looks to have supplied the ASX with just enough fuel for a tilt at Wednesday's five-and-a-bit-year closing high but probably not enough to push into clear air. Still, that looks increasingly likely to happen next week, barring negative developments in Ukraine over the weekend or nasty surprises in tonight's US jobs numbers or tomorrow's Chinese trade data. This is a very forgiving market right now and there were promising signs yesterday that the specs are starting to fire up after a hiatus. BIT provided some welcome excitement and one good runner like that is often enough to start a stampede. Eyes wide open today.
ECONOMIC NEWS: RBA Governor Glenn Stevens is due to testify before the House of Representatives Economic Committee from 9.30am EST. The Australian Industry Group's construction index is due at the same time. German industrial production is due tonight. US highlights include the monthly jobs report and unemployment rate, trade balance, average hourly earnings and consumer credit.
