The seesawing of global stock markets continued on Thursday morning, this time sending major indexes sharply higher after China assured investors that it was not avoiding euro-zone assets.
U.S. stock index futures were sharply higher with about 60 minutes before markets opened, suggesting that stocks would rise at the start of trading. Futures for the Dow Jones industrial average were up 169 points or 1.7 per cent. Futures for the broader S&P 500 were up 25 points or 2.4 per cent.
In Europe, the U.K.'s FTSE 100 was up 1.1 per cent and Germany's DAX index was up 2.3 per cent in afternoon trading. In Asia, Japan's Nikkei 225 rose 1.2 per cent in overnight trading.
This latest move appears to be connected to assurances from China that, despite the European debt crisis, it remains committed to diversifying its assets beyond the U.S. dollar. This has restored some much-needed confidence to the region, which is the source of most investor anxiety these days.
However, investors are all too aware that stocks have been behaving erratically recently. Over the past two trading days, North American markets have been whipsawed -- falling substantially on Tuesday morning only to end the day flat, then rising substantially on Wednesday morning only to end the day down.
Thursday's gains came ahead of two important economic reports, both released at 8:30 (ET). The Labor Department reported that U.S. initial jobless claims for the period ended last week fell by 14,000, to 460,000. The decline was close to expectations.
As well, U.S. economic growth in the first quarter was revised down to 3 per cent from 3.2 per cent previously. Economists had been expecting an upward revision to 3.4 per cent.
In Canada, the latest round of quarterly results from the Big Banks are likely to weigh on the S&P/TSX composite index. One day after Bank of Montreal blew past expectations with its results, investors are going to have to deal with three high-profile misses. As the Globe's , Royal Bank of Canada reported earnings of 96 cents a share, below expectations of $1.10. Toronto-Dominion Bank reported earnings of $1.36 a share, below expectations of $1.40. And Canadian Imperial Bank of Commerce reported earnings of $1.46 a share, below expectations of $1.49.