The major U.S. index futures are pointing to a higher opening on Friday, as Chinese GDP data matched expectations, easing fears of a sustained slowdown.
As of 6:30 am ET, the Dow futures are rising 46 points and the S&P 500 futures are edging up 4.90 points, while the Nasdaq 100 futures are moving up 9 points.
U.S. stocks closed lower yet again on Thursday, as economic pessimism continued to weigh on the markets.
The major U.S. averages opened notably lower and declined steadily until late morning trading. However, the averages gradually pared their losses until the mid-session before moving sideways and closing moderately lower.
The Dow Industrials lost 31.26 points or 0.25 percent before closing at 12,573 and the S&P 500 Index ended down 6.69 points or 0.50 percent at 1,335, while the Nasdaq Composite Index closed at 2,866, down 21.79 points or 0.75 percent.
Twenty-two of the thirty Dow components closed lower, with Cisco Systems (CSCO), Microsoft (MSFT), Intel (INTC), Hewlett-Packard (HPQ), American Express (AXP), Bank of America (BAC) and JP Morgan Chase (JPM) leading the Dow's decline. On the other hand, Merck (MRK) (up 4.13 percent), Procter & Gamble (PG) (up 3.75 percent), McDonald's (MCD) (up 2.68 percent) and Pfizer (PFE) (up 1.48 percent) advanced notably.
Oil, gold, financial and semiconductor stocks were among the worst performing stocks of the session, while housing stocks advanced.
On the economic front, jobless claims fell by more than expected in the week ended July 6th, although the decline was due to the distortions of summer auto plant shutdowns. The number of individuals filing for unemployment benefits fell by 14,000 to 350,000 and the four-week average slid 9,750 to 376,500. Continuing claims for the week ended June 30th fell by 14,0000 to 3.304 million.
Currency, Commodity Markets
Crude oil futures are trading at $86.08 a barrel after settling Thursday's trading at $86.08 a barrel, up $0.27 for the session. Gold futures are currently trading up $5.30 at $1,570.60 an ounce. In the previous session, gold fell $10.40 to $1,565.30 an ounce.
Among currencies, the U.S. dollar is trading at 79.29 yen compared to the 79.31 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.2206 compared to yesterday's $1.2203.
The major Asian markets closed mostly higher, as an in line Chinese GDP data gave investors some reason to cheer despite the encircling economic gloom.
Japan's Nikkei 225 average moved back and forth across the unchanged line throughout the session before closing up 4.11 points or 0.05 percent at 8,724, thereby snapping a six-session losing streak.
Resource, pharma, real estate and some technology stocks advanced, while utility stocks retreated sharply. Taiheiyo Cement, Oki Electric and Dowa Holdings were the biggest gainers of the session.
Meanwhile, Dentsu, which announced a deal to buy U.K.'s Aegis for $4.9 billion, slumped close to 7 percent. Utilities also lost ground after reports said the government would ask utilities to share the cost of decontaminating the area around nuclear plants. Insurance stocks also retreated sharply.
After some apprehensions in early trading, Australia's All Ordinaries moved decisively above the unchanged line and continued to hover in positive territory for the rest of the session. The index closed at 4,118, up 12.30 points or 0.30 percent. Utilities and financial stocks advanced, helping to offset the weakness in the energy space.
Hong Kong's Hang Seng Index closed 82.17 points or 0.43 percent higher at 19,107.
On the economic front, the Chinese National Bureau of Statistics reported that GDP rose 7.6 percent year-over-year in the second quarter, with sequential expansion at 1.8 percent. The annual growth rate was the weakest since the first quarter of 2009. At the same time, retail sales rose a better than expected 13.7 percent in June.
Industrial output rose 9.5 percent year-over-year in June compared to a 9.6 percent increase in May. Meanwhile, fixed asset investment for the first half of the year climbed 20.4 percent.
A government report showed that Japan's industrial output fell at a revised 3.4 percent monthly rate in May compared to the 3.1 percent decline estimated initially. Shipments fell 1.3 percent and inventories declined 0.7 percent.
European stocks are all advancing moderately, capitalizing on the Chinese GDP data. The gains came despite Moody's downgrading Italy's credit rating by two notches to 'Baa2' from 'A3', just two notches above junk status, citing contagion risk from Greece and Spain, higher funding costs and a deteriorating economic outlook. Most sectors barring, technology, bank and utility stocks, are advancing.
In corporate news, Pernod Ricard said it has signed an agreement with Arcus-Gruppen for the sale of a few of its brands and a production plant in Denmark for 103 million euros. The sale is in line with the company's strategy of focusing on priority brands.
Financial information company Experian reported that its total revenues rose 14 percent year-over-year for its first quarter, while its organic revenue growth came in at 9 percent.
French automaker Peugeot-Citroen announced plans for the elimination of 8,000 more jobs in France after the 6,000 job cuts announced last year. The company also plans to close a major factory north of Paris.
U.S. Economic Reports
The U.S. Labor Department is scheduled to release its report on the producer price index for June at 8:30 am ET. The index measures the average change over time in the prices received by domestic producers of goods and services. Economists expect the headline index for June to have declined by 0.4 percent but the core producer price index may have increased by 0.2 percent.
In May, producer prices fell by 1 percent month-over-month, the steepest drop since July 2009. The decline was due to a 4.3 percent plunge in energy prices and a 0.6 percent drop in food prices. Excluding food and energy, core producer price growth was in line with expectations at 0.2 percent.
The preliminary report of the Reuters/University of Michigan's consumer sentiment survey for July is scheduled to be released at 9.55 am ET. The consumer sentiment index is expected to have edged up to 73.5 from 73.2 in the previous month.
Atlanta Federal Reserve Bank President Dennis Lockhart is scheduled to speak to the Mississippi Economic Council in Jackson at 1:20 pm ET.
Stocks in Focus
Lexmark (LXK) released preliminary second quarter results, forecasting revenues to decline 12 percent year-over-year, as it grapples with a weak demand environment, especially in Europe, and unfavorable currency translation effect. This represented a downward revision from its earlier guidance for a 7-9 percent drop. The company now expects adjusted earnings of 87-80 cents per share compared to its earnings guidance of 95 cents to $1.05 per share.
Darden (DRI) entered into an agreement with TSG Consumer Partners for the purchase of Yard House US, a chain of premium casual dining restaurants, for $585 million. The company expects the deal to be dilutive to its 2013 earnings by 3-5 cents per share and accretive thereafter.
by RTT Staff Writer
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