3-8-18 9:20 AM EST | Email Article

By Victor Reklaitis, MarketWatch , Ryan Vlastelica

ECB leaves rates unchanged

U.S. stock-index futures pointed to a modestly higher open on Thursday, as traders braced for a much-discussed tariff plan that looks on track to become a reality.

President Donald Trump is expected to sign a decree that lays out his plan for levies on steel and aluminum imports this week, perhaps as soon as 3:30 p.m. Eastern Time on Thursday. He may spare major trading partners Canada and Mexico (http://www.marketwatch.com/story/white-house-suggests-canada-mexico-and-other-countries-can-avoid-tariffs-2018-03-07), according to published reports.

Read more:Trump tariff plan expected to exempt Canada, Mexico (http://www.marketwatch.com/story/trump-tariff-plan-expected-to-exempt-canada-mexico-after-house-republicans-protest-2018-03-08)

And see: China promises 'justified and necessary response' if trade war breaks out (http://www.marketwatch.com/story/china-promises-justified-and-necessary-response-if-trade-war-breaks-out-2018-03-08)

What are the main benchmarks doing?

Dow Jones Industrial Average futures rose 100 points, or 0.4%, to 24,897, while S&P 500 futures rose 12 points, or 0.4%, to 2,735. Futures for the tech-heavy Nasdaq-100 tacked on 40 points, or 0.6%, to 6,965.

On Wednesday, the Dow and S&P 500 closed with modest losses (http://www.marketwatch.com/story/dow-set-for-300-point-drop-after-cohns-exit-2018-03-07), though well above their intraday lows. The Nasdaq Composite finished moderately higher, rising for a fourth straight session.

The Dow is up 0.3% for the year as of Wednesday's close, while the S&P has gained 2% and the Nasdaq Composite has tacked on 7.2%. The three gauges stand below all-time highs set in late January, but they've also rallied from lows reached in early February, when investors were increasingly nervous about an uptick in inflation and rising interest rates.

What's driving markets?

Fears about a potential global trade war have weighed on markets this month, leaving the Dow down 0.9% so far in March. However the Russell 2000 , an index of small-capitalization stocks that is seen as having less exposure to this issue (http://www.marketwatch.com/story/worried-about-a-trade-war-stock-market-investors-should-think-small-2018-03-02), is up 4.1% over the same period.

The resignation late Tuesday of pro-trade White House adviser Gary Cohn has added to those concerns. Cohn left after failing to derail the tariffs plan. A trade war could threaten U.S. economic growth. Trading partner the European Union has lined up retaliatory action (http://www.marketwatch.com/story/eu-lines-up-its-salvos-to-fight-trump-tariffs-2018-03-08) if the Trump administration imposes levies on its products.

In an interview on Bloomberg TV, J.P. Morgan(JPM) boss Jamie Dimon said tariffs were "the wrong way" (http://www.marketwatch.com/story/jamie-dimon-says-trumps-tariff-plan-is-the-wrong-way-to-tackle-trade-problems-2018-03-08) to go about tackling trade problems.

Check out:MarketWatch's Economic Calendar (http://www.marketwatch.com/economy-politics/calendars/economic)

In the latest economic data, jobless claims rose by 21,000 in the latest week (http://www.marketwatch.com/story/jobless-claims-jump-21000-to-231000-a-week-after-setting-nearly-50-year-low-2018-03-08), rebounding off their lowest level since 1969.

No Federal Reserve officials are scheduled to speak Thursday, but the European Central Bank will be closely watched after the ECB left interest rates unchanged (http://www.marketwatch.com/story/european-central-bank-leaves-rates-policy-statement-unchanged-2018-03-08), as had been expected. It also said it would increase its program of asset purchases if its outlook deteriorates (http://www.marketwatch.com/story/european-central-bank-leaves-rates-policy-statement-unchanged-2018-03-08).

Read MarketWatch's live blog of the ECB President Mario Draghi's press conference (http://www.marketwatch.com/story/live-blog-ecb-moves-step-closer-to-ending-qe-2018-03-08)

What are strategists saying?

"The tariffs are driving volatility in the short term, but it seems like it is more about politics than a fundamental policy change, given the reports that Mexico and Canada could be exempt. We think the likelihood of a full trade war are low, and that any market dips are a buying opportunity," said Abe Sheikh, co-chief investment officer of Cougar Global. Cougar is an affiliate of Carillon Tower Advisors, which has $65 billion in assets.

"Valuations are on the high end, though they're somewhat justified by earnings growth. However, we're especially careful about investing in markets that have bigger downside risk."

What are other assets doing?

European stocks (http://www.marketwatch.com/story/european-stocks-rise-for-4th-day-in-a-row-as-ecb-steals-focus-from-us-tariffs-2018-03-08) were mostly rising for a fourth session in a row. Asian markets closed higher (http://www.marketwatch.com/story/asian-markets-recover-though-worries-remain-post-cohn-2018-03-07).

Check out:Here's the case for a hawkish tweak to the ECB's policy guidance (http://www.marketwatch.com/story/heres-the-case-for-an-unexpected-tweak-to-the-ecbs-policy-guidance-2018-03-07)

Gold futures were slightly lower while oil futures were edging up (http://www.marketwatch.com/story/oil-prices-steady-after-us-output-climb-helps-drive-plunge-2018-03-08). The ICE U.S. Dollar Index was mostly unchanged.

Which stocks look like key movers?

Shares in Express Scripts Holding Co.(ESRX)soared 16% in premarket action after health insurer Cigna Corp.(CI)said it plans to buy the pharmacy-benefits manager in a $67 billion deal (http://www.marketwatch.com/story/cigna-to-buy-express-scripts-for-67-billion-2018-03-08). Cigna's stock fell 5% in thin premarket trading.

Supermarket operator Kroger Co.(KR) sank 6.4% in premarket trading after it reported its fourth-quarter results (http://www.marketwatch.com/story/krogers-stock-tumbles-after-profit-same-store-sales-match-expectations-2018-03-08).

Rent-A-Center Inc.(RCII) rose 0.5% before the bell a day after it announced layoffs and said it was reviewing "strategic and financial alternatives (http://www.marketwatch.com/story/rent-a-center-announces-layoffs-says-board-reviewing-alternatives-2018-03-07)" to maximize stockholder value, including evaluating the sale of the company.

American Eagle Outfitters Inc.(AEO) gained 1.6% in early trading after it reported strong-than-expected revenue and raised its dividend (http://www.marketwatch.com/story/american-eagles-stock-surges-after-sales-beat-upbeat-outlook-and-raised-dividend-2018-03-08).

Shares in Costco Wholesale Corp.(COST) fell 0.5% in premarket trading a day after it posted better-than-expected revenue (http://www.marketwatch.com/story/costco-shares-wobbly-after-revenue-tops-street-view-2018-03-07) along with earnings that were boosted by the U.S tax overhaul

Also late Wednesday, newspaper publisher Tronc Inc.(TRNC)reported earnings that missed forecasts (http://www.marketwatch.com/story/tronc-stock-flat-after-earnings-miss-2018-03-07) but revenue that beat expectations, while casino operator Caesars Entertainment Corp.(CZR)said it swung to a quarterly profit (http://www.marketwatch.com/story/caesars-shares-higher-after-casino-company-swings-to-profit-2018-03-07).

Rent-A-Center Inc.looks set for an up day after the rent-to-own company said late Wednesday it was laying off about 25% of its corporate workforce (http://www.marketwatch.com/story/rent-a-center-announces-layoffs-says-board-reviewing-alternatives-2018-03-07) in Plano, Texas, in a plan to save $65 million to $85 million.


(END) Dow Jones Newswires

March 08, 2018 09:20 ET (14:20 GMT)

Copyright (c) 2018 Dow Jones & Company, Inc.
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