Nasdaq jumps 1% in open amid China rebound

CNBC-U.S. stocks opened sharply higher on Thursday, rebounding from the recent decline as a jump in Chinese stocks overnight boosted investor sentiment.

The Dow Jones industrial average surged more than 230 points in the open as the major averages jumped more than 1 percent.

“We’re off to a decent start (in earnings) but it’s a little down from the first quarter,” said Nick Raich, CEO of The Earnings Scout. “But the focus overseas is still driving markets. Policy makers are doing everything they can to prevent selloff in China.’

The Shanghai Composite shot 5.8 percent higher on Thursday for its best day in six years after China instituted new supportive measures, including restrictions on short selling and loosening of margin lending regulations.

European stocks also surged, with the DAX up more than 2 percent, as investors remained hopeful of a Greece proposal before the Friday deadline.

Athens on Wednesday formally applied for a three-year loan, with the government later on Thursday expected to present new reform proposals to secure further aid. Euro zone finance ministers will meet this weekend to discuss the reforms.
U.S. stocks closed lower by nearly 1.5 percent or more on Wednesday, with the S&P and Dow below their 200-day moving averages, as continued concerns about Greece and the extended selloff in the Chinese market weighed on investor sentiment. Floor trading on the New York Stock Exchange was suspended for more than 3.5-hours due to a technical glitch.
“Whether it’s Greece, China, or Puerto Rico, I think a lot of it has to do with the fact that we’ve been so long without a correction,” said Jeff Clark, an analyst at Stansberry. “This is one of those situations where you see those wonder rallies for one or two days. … I certainly wouldn’t want to be buying on a big gap up today.”

He said on Wednesday the S&P 500 came close enough to his 1-month forecast of 2,038 and is now oversold, setting up for a short-term bounce.

On the domestic front, weekly jobless claims data showed a slight increase to 297,000.

There are several Federal Reserve speakers on the calendar, while Fed Chair Janet Yellen speaks on Friday.

Thursday’s speakers include Fed Gov. Lael Brainard speaking at 10:15 a.m. ET on regulatory reform; Minneapolis Fed President Narayana Kocherlakota at 6:45 a.m. on fiscal policy; Kansas City Fed President Esther George at 12:30 p.m. on the economic outlook and monetary policy; and Chicago Fed President Charles Evans at 9:30 a.m.

Earnings are also in focus, with PepsiCo and Walgreens Boots Alliance posting results before the bell. .

Pepsico reported adjusted quarterly profit of $1.32 per share, 8 cents above estimates, with revenue also beating forecasts. The firm’s profit margins expanded during the quarter, and it raised its full-year forecast although it adds that currency will have a negative impact of 11 percentage points on full-year profit.

Walgreens Boots Alliance earned an adjusted $1.02 per share for its latest quarter, 15 cents above estimates, though revenue was shy of forecasts. The drug store operator also raised its full-year earnings forecast, and increased its quarterly dividend by 6.7 percent to 36 cents per share.

Bond yields rose, with the 10-year yield at 2.27 percent. The U.S. Treasury is scheduled to auction $13 billion 30-year bond auction at 1 p.m.

The U.S. dollar edged higher, with the euro steady near $1.10.

—CNBC’s Peter Schacknow contributed to this report.

On tap this week:

Earnings: Pepsico, Walgreens Boots Alliance, PriceSmart, Cintas, Barracuda Networks

10:15 a.m.: Fed Gov. Lael Brainard
1 p.m.: $13 billion 30-year bond auction

12:30 p.m.: Kansas City Fed President Esther George on economy and policy

10 a.m.: Wholesale trade

11:35 a.m.: Boston Fed President Eric Rosengren

12:30 p.m.: Fed Chair Janet Yellen on economy

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