US pre-open: Wall Street set to extend gains with investors buoyed by Chinese data

US stock futures pointed to a third straight day of gains, as Wall Street followed European and Asian equities higher on the back of some better-than-expected Chinese data.

The Dow Jones Industrial Average is expected to open approximately up 99 points, while the S&P 500 and the Nasdaq are set to begin the session 11 and 36 points higher respectively.

Chinese manufacturing PMIs point in different directions

Asian stocks closed mostly higher, with investors buoyed by news that concerns over a slowdown in China looked to be easing up.

According to government data, factory output in China improved slightly, edging up to 49.8 from August’s three-year low of 49.7 and against analysts’ expectations for an unchanged reading.

However, a separate survey conducted by Caixin/Markit revealed the purchasing managers’ index fell to a six-and-a-half year low, slipping from August’s reading of 47.3 to 47.2, although the figure was marginally better than the 47 flash estimate published last month.

“Economic growth in emerging economies has weakened substantially this year, and China may well see its growth slow to 6.8% this year from 7.3%, and the PMI data tends to confirm this,” said Brenda Kelly, head analyst at London Capital Group.

Thursday data

On the economic data front, a report on weekly jobless claims expected to show that 270,000 Americans filed for unemployment benefits last week is on tap at 1330 BST.

Investors will also get to analyse a reading on US manufacturing data for September, with the Markit manufacturing PMI released at 1445 BST and the ISM manufacturing index on tap at 1500 BST.

“With Yellen failing to provide any relevant policy comments in her speech in St Louis last night, the onus is back on US data to try and indicate a timeline for 2015’s likely rate-hike,” said Spreadex’s financial analyst Connor Campbell.

Construction spending for August is also scheduled at 1500 BST, while San Francisco Federal Reserve President John Williams, a voting member of the Federal Open Market Committee, will give a speech on the economic outlook in Salt Lake City at 1930 BST.

In company news, Deere & Co edged 0.52% higher ahead of the bell after the tractor maker said it had reached a tentative agreement with the United Auto Workers Union to replace a deal expired on Thursday.

Wal-Mart gained 1.66% in pre-market trading despite news a round of layoffs could get underway as early as Friday, while Google and Microsoft climbed 2.53% and 1.20% respectively after agreeing to dismiss patent-related lawsuits between each other.

Elsewhere, European stocks edge higher, while oil prices staged a solid rebound, with West Texas Intermediate climbing 2.37% to $46.18 a barrel, while Brent rose 1.91% to $49.31 a barrel.

The dollar fell 0.12% against the pound but gained 0.17% and 0.10% against the euro and the yen respectively, while gold futures slid 0.16% to $1,113.32.