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Wall Street Shaking Off Its Fiscal Cliff Fears

Wall Street Shaking Off Its Fiscal Cliff Fears

Wall Street seems to be shifting its focus to a few stronger economic signals coming forth from the global economy, as indicated by the U.S. index futures, which point to a higher opening on Friday. After jobless claims in the U.S. fell more than expected and core retail sales exceeded expectations, the markets get to digest a better than expected manufacturing sector reading from China and data showing an improvement in eurozone private sector activity. These positive catalysts could temporarily allay market fears, although anxiety could flare up anytime, given the fiscal cliff headwinds.

As of 6:30 pm ET, the Dow futures are rising 40 points and the S&P 500 futures are adding 3.80 points, while the Nasdaq 100 futures are gaining 3.0 points.

U.S. stocks retreated on Thursday, as fiscal cliff fears intensified due to indecision among lawmakers. The release of some mixed economic data did not make it easy for the markets either.

On the economic front, the consumer price index for November is scheduled to be released at 8:30 am ET. The index is a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services. Economists expect the headline index to have declined by 0.2 percent, while the core reading may have risen 0.2 percent.

The Federal Reserve's industrial production report is due out at 9:15 am ET. Economists estimate a 0.1 percent drop in the industrial production performance for November, while manufacturing output is estimated to have increased by 0.3 percent. Capacity utilization may edged up by 0.2 points at 78 percent. In October, industrial production rose 0.4 percent month-over-month, while capacity utilization fell 0.4 points to 77.8.

In corporate news, Adobe Systems (ADBE) reported fourth quarter non-GAAP earnings of 61 cents per share, lower than 67 cents per share last year. Revenues fell to $852.84 million from $931.90 million last year. The results were ahead of estimates, while the guidance was soft.

Nordson (NDSN) reported fourth quarter non-GAAP earnings of $1.07 per share, higher than 86 cents per share last year. Net sales rose to $438.68 million from $331.02 million in the year-ago period. The results exceeded estimates. For the first quarter, the company expects GAAP earnings of 63-70 cents per share on sales of $343 million to $354 million.

Quiksilver (ZQK) reported fourth quarter pro forma earnings of 7 cents per share compared to 5 cents per share last year. Net revenues rose 12 percent to $279 million. The results trailed estimates.

PPG (PPG) said it has agreed to buy Akzo Nobel's North American architectural coatings business for $1.05 billion. Separately, the company announced a 31 percent increase in its quarterly dividend to 47 cents per share and an additional share repurchase authorization in the amount of $2 billion.

Amgen (AMGN) announced the appointment of its CEO Robert Bradway as the Chairman of its board, effective January 1st, 2013. Nasdaq OMX (NDAQ) said it has appointed its interim Chairman Borje Ekholm permanently to the position.

Progress Energy (PRGS) announced the decision of its CFO Melissa Cruz to retire in 2013 for personal reasons. The company also said it is initiating a search process.

The Asian markets closed on a mixed note, as the negative close on Wall Street overnight and weak business sentiment data from Japan led to subdued trading in the region. The Indonesian, Malaysian, Japanese, South Korean and Taiwanese markets closed lower, while the rest of the major markets ended in positive territory.

After trading below the unchanged line in the morning, Japan's Nikkei 225 average recovered in the afternoon only to give up their gains in late trading and close down 5.17 points or 0.05 percent at 9,738.

Despite showing some degree of volatility, Australia's All Ordinaries hovered in positive territory for much of the session, closing up 2.20 points or 0.05 percent at 4,595. Material and financial stocks saw some strength, while, energy and healthcare stocks moved to the downside.

Hong Kong's Hang Seng Index closed at 22,606, up 160.40 points or 0.71 percent.

The results of the quarterly Tankan survey done by the Bank of Japan showed that business sentiment among large manufacturers waned notably in the fourth quarter. The index measuring business sentiment among large manufacturers fell to -12 in the fourth quarter compared to -3 in the third quarter. Economists had expected a reading of -10.

Chinese manufacturing activity picked up pace in December, according to the results of a survey by Markit Economics. The manufacturing purchasing managers' index based on the survey rose to a 14 month high of 50.9 in December.

European stocks are trading on a mixed note after seeing lackluster sentiment in the previous session. Markit's report showed that the private sector activity in the eurozone contracted at a slower rate in December. Preliminary estimates for the composite purchasing managers' index came in at 47.3 compared to 46.5 in November. Flash estimates for the manufacturing index rose 1.1 points to 47.8, while the index for the service sector edged up 0.1 point to 46.3.

by RTT Staff Writer

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