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Wall Street's Concerns Return As Chinese Growth Sag, JPM Reports


Wall Street's concerns have returned after Chinese growth slowed more than expected and as earnings from some key bank companies loomed. The index futures point to a moderately lower opening on Friday. The previous two sessions' gains may make traders wary, especially so as traders digest weaker than expected Chinese data. Google (GOOG) reported stellar quarterly earnings and also warmed the Street with its plans to create a new class of stocks.

The impending earnings announcement by JP Morgan (JPM) may also create some uneasiness. Traders may also focus on a consumer sentiment reading to be released shortly after the markets open and a speech by Federal Reserve Chairman Ben Bernanke.

As of 6:30 am ET, the Dow futures are receding 52 points, the S&P 500 futures are slipping 6.10 points and the Nasdaq 100 futures are moving down 10.50 points.

U.S. stocks extended their gains on Thursday amid the release of some mixed economic data and earnings hopes.

On the economic front, the consumer price index for March is scheduled to be released at 8:30 am ET. Economists expect the headline index to have increased 0.3 percent compared to a 0.2 percent increase in core inflation. In February, the headline and core inflation were 0.4 percent and 0.1 percent, respectively.

The preliminary report of the Reuters/University of Michigan's consumer sentiment survey for April is scheduled to be released at 9.55 am ET. The consumer sentiment index is expected to remain unchanged at 76.2.

Bernanke will also speak to the russell Sage Foundation and The Century Foundation on "Rethinking Finance" at 1 pm ET.

In corporate news, Google reported better than expected first quarter earnings, while revenues, excluding traffic acquisition costs, rose 24 percent to $8.14 billion.

The company also announced plans to create a new class of non-voting shares, which would be distributed through a stock dividend to all existing shareholders.

Best Buy (BBY) said its board is creating a committee to run a global search process to identify a CEO. The search is expected to take 6-9 months to complete.

TIBCO Software (TIBX) announced the completion of the acquisition of LogLogic, a private company offering scalable log and security management platforms designed for the enterprise and cloud.

Dow Chemical (DOW) announced that its board approved a 28 percent increase in its second quarter dividend to 32 cents per share.

J.B. Hunt (JBHT) said its first quarter earnings per share rose to 57 cents per share from 40 cents per share in the year-ago period. Total operating revenues rose to $1.17 billion to $1.00 billion. The results were better than expected.

Coinstar (CSTR) issued preliminary first quarter guidance that was above consensus estimates and the updated full year guidance also exceeded expectations. The full year revenue guidance surrounded the consensus estimates.

The major Asian markets closed higher, inspired by Wall Street's rally overnight. Additionally, reports suggesting that North Korea's rocket launch failed brought about some relief.

Japan's Nikkei 225 average opened higher and moved broadly sideways before closing up 113.20 points or 1.19 percent at 9,638. Fast Retailing surged up over 8 percent after reporting a 11.8 percent increase in its first half operating profit, while Sony lost 5.50 percent in reaction to its job cut announcement.

Australia's All Ordinaries closed 42.50 points or 0.97 percent higher at 4,404 and Hong Kong's Hang Seng Index added 373.72 points or 1.84 percent at 20,701.

Data released by the Chinese National Bureau of Statistics showed that China's economic growth slowed to 8.1 percent in the first quarter, slower than the fourth quarter growth of 8.6 percent. Economists had expected a more modest slowdown to 8.4 percent. The statistical agency also released industrial production data for March, which rose 11.9 percent compared to the 11.5 percent increase expected by economists. The retail sales growth for March was also better than expected.

The major European markets are seeing weakness after the two-session rally. Evidence of slowing growth in China and apprehensions ahead of J.P. Morgan's results are keeping sentiment subdued.

Final estimates released by the German Federal Statistics Office showed that the annual inflation eased to 2.3 percent in March from the 2.5 percent rate in February.

Producer price inflation report released by the U.K.'s Office for National Statistics showed that the U.K.'s output price inflation slowed to 3.6 percent year-over-year, the slowest pace in about 2 years. Nevertheless, the inflation rate came in above the 3.5 percent forecast by economists.

by RTTNews Staff Writer

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