daytrading oct 12 pre-market

Morning traders.

Market wrap:

A mixed night on Wall Street has Australian shares facing a flat start despite gains in key commodities.

The December SPI 200 futures contract ended the night session one point or less than 0.1% ahead at 4477 as US jobless claims dropped to a four-year low and weakness in the US dollar lifted oil and most metals.

The S&P 500 broke a four-session losing run despite a steady fade that stripped most of its gains. The benchmark index closed 0.03% or less than a point higher after earlier rallying as much as 11 points. The Dow lost 19 points or 0.14% and the Nasdaq 0.09%.

Initial euphoria over a 30,000 fall in weekly first-time unemployment claims to a four-and-a-half year low of 339,000 was tempered by reports that the decline came mostly from one state and may have been a result of data collection issues. Nonetheless, the data fit the recent trend of steady improvement in the employment market.

"The economy is improving, we're doing a better job," the chief equity strategist at Federated Investors in the US told Bloomberg. "I think we should be going faster but this is a phenomenal claims number. So now the question is, 'Is this number real or is it going to get revised away next week?'"

Another positive overnight was an upgraded outlook for US stocks from Citigroup, which predicted that the S&P 500 could rally as much as 12% by the end of next year. The bank cited central bank stimulus and an improving housing market as reasons to lift its recommendation on US equities to "overweight" from "neutral".

Energy stocks led gains on Wall Street as tensions between Turkey and Syria continued to support the price of oil. West Texas crude for November delivery was lately up $1.21 or 1.3% at US$92.46 a barrel despite a larger increase in US weekly inventories than analysts expected.

In Europe, yesterday's credit downgrade for Spain was offset by an appeal by International Monetary Fund chief Christine Lagarde for more time for Spain and Greece to put their houses in order. Also helping European markets was a Bloomberg report that the European Union may postpone introducing tight new banking regulations, easing the pressure on struggling euro-zone banks. Germany's DAX rallied 1.07%, France's CAC 1.43% and Britain's FTSE 0.92%.

A downturn in the US dollar supported dollar-denominated metals prices. Gold for December delivery was recently up $4 or 0.2% at US$1,769.10 an ounce.

Copper recovered from a two-week low ahead of Chinese trade data this weekend and GDP figures next week. US copper for December delivery was recently up three cents or 0.8% at US$3.75 a pound. In London, copper advanced 0.8%, aluminium 0.4% and tin 0.3%. Zinc eased 0.3%, lead lost 0.6% and nickel was flat.

TRADING THEMES TODAY

SEARCHING FOR DIRECTION: A positive start on Wall Street fizzled away to nothing as the major share indexes continue to toy with support levels. But at least the S&P 500's four-day retreat was arrested. There is not a lot there for our market to go on, but strength in oil, gold and some of the base metals may help. Small caps outperformed in the US, lifting the Russell 2000 around 0.4%. Banks and oilers were other stand-outs.

ECONOMIC NEWS: No significant domestic news scheduled today. Europe has industrial production figures due tonight. The IMF is meeting in Japan. Highlights in the US include the producer price index/core PPI, preliminary consumer sentiment and inflation expectations and the Federal Budget Balance.

Good luck to all.