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Stocks flat before key economic data

David Russell (david.russell@optionmonster.com)

U.S. stocks are little-changed this morning as investors prepare for a wave of economic data.

Most of the trading overseas has been positive after two reports showed China's manufacturing sector gradually expanding. The Shanghai Composite surged 1.7 percent, while Hong Kong's Hang Seng rose 0.8 percent. Most of the European indexes are higher by about half a percent.

The U.S. economic news already began with the Challenger job-cut report, which showed layoffs higher by 12 percent versus last year. The data grows more important at 8:15 a.m. ET with ADP's survey of private-sector job additions and weekly jobless claims 15 minutes later. More news follows at 10 a.m. ET, with the Institute for Supply Management's manufacturing index and the Conference Board's consumer confidence index.

Investors are currently debating whether stocks remain a good value with the S&P 500 already up 12 percent on the year, holding levels not seen since mid-2008. They've been stomaching mediocre quarterly reports as companies lower outlooks in response to weakness overseas, and the big question now is whether the global economy will recover enough to keep stocks climbing. Today's reports will help determine the answer.

Copper is the strongest of the commodities with a 1 percent gain after China's manufacturing data. Coal stocks, which follow the demand for metals as well, have been the leading sector on our researchLAB tool in the last month as investors wager on better growth from the mainland. Agricultural foodstuffs are also stronger across the board.

Other commodities are showing more modest gains. Gold rose by about one-quarter of a percent and silver by two-thirds of 1 percent, while oil is mixed. The main trend in the foreign-exchange market is continued weakness in the Japanese yen, which also tends to support equities and materials.

In company-specific news, retailers will be active as they report monthly same-store sales. Zumiez is already indicated lower after its numbers lagged estimates. Pharmaceuticals giant Pfizer is also down by about 1 percent in the premarket after its quarterly revenue missed consensus estimates.

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