With traders expressing optimism about the possibility of further stimulus, stocks may move to the upside in early trading on Friday. The major index futures are currently pointing to a modestly higher open for the markets, with the Dow futures up by 22 points.
The markets are likely to benefit from news that the U.K. government and the Bank of England have announced additional measures to boost the credit and financial markets.
The measures will offer banks billions of pounds in cheap credit in an effort to stimulate lending while also providing access to short-term money to deal with "exceptional market stresses."
A note from Capital Economic said, "The measures should help to ease strains in the banking sector, but there are question marks over whether they will actually result in higher lending to the private sector."
Traders also continue to digest Thursday's report from Reuters indicating that central banks from major economies are prepared to take necessary steps to stabilize the financial markets after the Greek elections on Sunday.
"The central banks are preparing for coordinated action to provide liquidity," Reuters quoted a senior G20 aide familiar with discussions among international financial diplomats as saying.
Nonetheless, trading activity may be somewhat subdued amid lingering uncertainty about the outcome of the elections in Greece. The results of the elections will have a significant impact on whether the debt-plagued nation sticks to the terms of its international bailout.
The markets have also recently been presented with a report from the New York Federal Reserve showing a substantial slowdown in the pace of growth in regional manufacturing activity.
The New York Fed said its general business conditions index fell to 2.3 in June from 17.1 in May, although a positive reading still indicates growth in regional manufacturing activity. Economists had expected the index to show a much more modest decrease to a reading of 13.8.
The Federal Reserve is also scheduled to release its report on industrial production not long before the start of trading, while Reuters and the University of Michigan are due to release their report on consumer sentiment not long after the open.
After moving mostly higher over the course of morning trading on Thursday, stocks saw considerable volatility in the final hour of trading. The markets managed to end the day on the upside amid optimism about the likelihood of further stimulus.
The major averages all ended the day in positive territory, offsetting the losses posted in the previous session. The Dow jumped 155.53 points or 1.2 percent to 12,651.91, the Nasdaq rose 17.72 points or 0.6 percent to 2,836.33 and the S&P 500 climbed 14.22 points or 1.1 percent to 1,329.10.
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher on Friday, although Japan's Nikkei 225 Index closed only just above the unchanged line. Hong Kong's Hang Seng Index surged up by 2.3 percent, while Australia's All Ordinaries Index rose by 0.4 percent.
The major European markets have also shown notable moves to the upside on the day. While the U.K.'s FTSE 100 Index is up by 0.3 percent, the German DAX Index and the French CAC 40 Index are up by 1.2 percent and 1.4 percent, respectively.
In commodities trading, crude oil futures are climbing $0.18 to $84.09 a barrel after advancing $1.29 to $83.91 a barrel on Thursday. Gold futures are rising $10.70 to $1,630.30 an ounce. In the previous session, the precious metal edged up $0.20 to $1,619.60 an ounce.
Among currencies, the U.S. dollar is trading at 78.66 yen compared to the 79.36 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.2612 compared to yesterday's $1.2633.
by RTT Staff Writer
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