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Wall Street On Tenterhooks As Economic Worries Linger


An uneasy mood prevails on Wall Street on Friday, as unconvinced traders look ahead to the first read of first quarter GDP and a consumer sentiment reading. A few blue chip earnings scheduled for the day may also give direction to the markets. Meanwhile, a Standard & Poor's 2-notch downgrade of Spain's credit rating on the grounds of a probable deterioration in the country's public finances may keep traders on the edge over the unsettled European debt crisis.

As of 6:30 am ET, the Dow futures are up 6 points and the Nasdaq 100 futures are advancing 4.50 points, while the S&P 500 futures are receding 0.30 points.

On the economic front, the Bureau of Economic Analysis is due to release its advance estimate of first quarter GDP at 8:30 am ET. Economists expect the GDP growth of 2.5 percent for the quarter following a 3 percent expansion in the fourth quarter.

Additionally, the Labor Department is scheduled to release its report on the employment cost index for the first quarter at 8:30 AM ET. Economists expect a 0.5% in the index for the quarter.

The Reuters and the University of Michigan's final report on the consumer sentiment index for April is scheduled to be released at 9:55 am ET. The consumer sentiment index is expected to be upwardly revised to 75.8 from the mid-month reading of 75.7.

In economic news, Amazon's (AMZN) first quarter results beat estimates, while its second quarter guidance surrounded the consensus estimate.

Weyerhaeuser (WY) reported first quarter adjusted earnings that were better than expected, while its revenues were slightly shy of estimates. Skyworks (SWKS) reported better than expected second quarter results and issued in line guidance for the third quarter.

Expedia (EXPE) reported first quarter adjusted earnings that exceeded estimates, while its revenues also were above estimates.

Republic Services (RSG) reported first quarter adjusted earnings that came in below estimates. The company also lowered its 2012 earnings guidance.

Starbucks (SBUX) reported better than expected first quarter results and it also raised its 2012 earnings and revenue guidance, which however were below estimates. Callaway Golf's (ELY) first quarter results missed expectations and Allscripts (MDRX) also reported worse than expected results. The company also announced the resignation of its CFO. Meanwhile, Western Digital's (WDC) third quarter earnings handily beat expectations.

Seagate Technology (STX) announced that its board has authorized the buy back of up to $2.5 billion of its outstanding shares.

Newmont Mining (NEM) reported better than expected adjusted earnings for its first quarter, while revenues were shy of estimates. KLA-Tencor's (KLAC) second quarter earnings and revenues came in ahead of estimates.

Amgen (AMGN) said the FDA has issued a complete response letter for the sBLA for denosumab to treat men with castration-resistant prostate cancer at high risk of developing bone metastases. GlaxoSmithKline (GSK) said the FDA has approved Votrient for the treatment of patients with advanced soft tissue sarcoma who have received prior chemotherapy.

The Spanish downgrade left the Asian markets unsettled, as they moved about showing a lack of direction and closed mostly lower. In an important Main Street development domestically, the Bank of Japan concluded at the end of its monetary policy meeting that a status quo stance with respect to its main policy rate is warranted, although it decided to raise the total size of its asset purchase program by 5 trillion yen to 70 trillion yen.

Japan's Nikkei 225 average ended down 40.94 points or 0.43 percent at 9,521 and Australia's All Ordinaries closed 11.60 points or 0.26 percent lower at 4,433. Hong Kong's Hang Seng Index lost 68.26 points or 0.33 percent before closing at 20,742.

The major European markets are trading on a mixed note amid the release of mostly positive earnings and mixed reception to debt offerings by Italy. Italy sold long term bonds close to the high end of its targeted range, although demand and borrowing costs were higher than at earlier auctions.

The results of a survey by the GfK showed that German consumer sentiment is set to decline in May. The consumer climate index based on the survey is expected to decline to 5.6 in May from a revised reading of 5.8 in April.

by RTTNews Staff Writer

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