US pre-open: Futures rise on wake of dovish Fed comment

LONDON (ShareCast) – Dow Futures pointed to a higher open on Thursday, in the wake of dovish comments from a Federal Reserve member. The Dow Jones Industrial Average is expected to open 150 points higher than Wednesday’s close of 17,584.52, while the S&P 500 and the Nasdaq are expected to begin the day 15 and 32 points higher respectively.

On Wednesday, Wall Street reversed a five-day losing streak to record its first gain of 2015 and the positive momentum is set to continue, with oil prices rebounding towards the $ 51-a-barrel mark.

Speaking at an event on Wednesday, Charles Evans, the president of the Chicago Fed, said the US might not hit the central bank’s target inflation rate until 2018 and that there might not be an interest rate hike until 2016.

“Fed minutes were heavily caveated; confidence in the labour market was tempered by fears of raising rates too soon, global imbalances and US inflation below its 2% target,” said Jasper Lawler, market analyst at CMC Markets. “The market came away with the idea that the Fed hasn’t decided when to move on rates and is happy to stay on hold while the oil-effect on inflation runs its course.” Elsewhere, a Labor Department report showed that 294,000 workers filed first-time application for unemployment benefits in the week ended 3 January, a 4,000 decline from the previous week but a smaller drop than forecast.

In corporate news, Costco Wholesale shares could see action ahead of the bell after the retailer reported a 5% increase in same-store US sales last month.

Pharmaceutical group Biodel (NasdaqCM: BIOD – news) soared over 40% after announcing its concentrated insulin treatment had been proven in Phase 2 clinical trials to be superior to rival treatments, while NephroGenex (NasdaqCM: NRX – news) leapt almost 20% after the firm received good news for its diabetic nephropathy treatment.

Elsewhere in the life sciences sector, Bind Therapeutics (NasdaqGS: BIND – news) surged 48% after saying it expects one of its partners to file a drug application by the middle of the year that will incorporate its Accurin drug-delivery particles.

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