Stocks are likely to move to the downside in early trading on Friday amid waning optimism about the likelihood of further stimulus from the Federal Reserve. The major index futures are pointing to a moderately lower open, with the Dow futures down by 61 points.
The downward momentum for the markets comes as traders continue to digest Federal Reserve Chairman Ben Bernanke's testimony before the Joint Economic Committee on Thursday.
While Bernanke said that Fed "remains prepared to take action" if the economic situation worsens, he made no explicit reference to further easing measures.
Disappointing trade data from Germany has also generated some negative sentiment, with a report from the Federal Statistical Office showing a 4.8 percent drop in imports in April.
Meanwhile, the Commerce Department recently released a report showing that the U.S. trade deficit narrowed to $50.1 billion in April from a revised $52.6 billion in March.
Economists had expected the deficit to narrow to $49.3 billion from the $51.8 billion originally reported for the previous month.
The narrower trade deficit for the month came as the value of U.S. imports fell at a faster rate than the value of U.S. exports
After failing to sustain an early upward move, stocks turned in a relatively lackluster performance over the course of the trading day on Thursday. Notable selling pressure emerged in the final hour of trading, however, resulting in a mixed close for the markets.
The major averages ended the day on opposite sides of the unchanged line, with the Dow climbing 46.17 points or 0.4 percent to 12,460.96, while the Nasdaq fell 13.70 points or 0.5 percent to 2,831.02 and the S&P 500 edged down 0.14 points or less than a tenth of a percent to 1,314.99.
In overseas trading, stock markets across the Asia-Pacific region moved back to the downside on Friday after closing higher in the three previous sessions. Japan's Nikkei 225 Index tumbled by 2.1 percent, while Hong Kong's Hang Seng Index dropped by 0.9 percent.
The major European markets have also come under pressure on the day. The U.K.'s FTSE 100 Index is down by 0.5 percent, the German DAX Index is down by 0.6 percent, and the French CAC 40 Index is down by 0.7 percent.
In commodities trading, crude oil futures are sliding $2.21 to $82.61 a barrel after slipping $0.20 to $84.82 a barrel on Thursday. Gold futures, which plunged $46.20 to $1,588 an ounce in the previous session, are currently retreating $5.50 to $1,582.50 an ounce.
Among currencies, the U.S. dollar is trading at 79.34 yen compared to the 79.63 yen it fetched at the close of New York trading on Thursday. Again the euro, the dollar is valued at $1.2472 compared to yesterday's $1.2560.
by RTT Staff Writer
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