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Stocks May Extend Sideways Trend In Early Trading - U.S. Commentary


Stocks may turn in yet another lackluster performance in early trading on Friday after closing mixed in each of the three previous sessions. The futures are currently pointing to a roughly flat open for the markets, with the Dow futures down by just 3 points.

After moving sharply higher over the course of January, stocks appear to have entered a consolidation phase in the first half of February.

While the major averages have maintained a positive bias, uncertainty about the near-term outlook for the markets has limited the upside.

Nonetheless, some positive sentiment may be generated by a report from the New York Federal Reserve showing that conditions for New York manufacturers improved for the first time since the summer in the month of February.

The New York Fed said its general business conditions index jumped to a positive 10.0 in February from a negative 7.8 in January, with a positive reading indicating an increase in regional manufacturing activity. Economists had expected the index to climb to a negative 1.8.

Shortly before the start of trading, the Federal Reserve is also due to release its report on industrial production in the month of January.

Reuters and the University of Michigan are also scheduled to release their preliminary report on February consumer sentiment not long after the open.

Nonetheless, trading activity may remain subdued as traders keep an eye on a meeting of G20 finance ministers and central bank governors in Moscow, with currency valuations likely to feature prominently in the talks.

After recovering from an early move to the downside, stocks turned in another lackluster performance over the course of the trading day on Thursday. The major averages eventually closed mixed for the third consecutive session.

While the major averages all closed near the unchanged line, the Dow posted a modest loss. The Dow edged down 9.52 points or 0.1 percent to 13,973.39, while the Nasdaq crept up 1.78 points or 0.1 percent to 3,198.66 and the S&P 500 inched up 1.05 points or 0.1 percent to 1,521.38.

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Friday. While Japan's Nikkei 225 Index tumbled by 1.2 percent, Hong Kong's Hang Seng Index edged up by 0.1 percent.

The major European markets have also turned mixed on the day. The German DAX Index is just below the unchanged line, while the U.K.'s FTSE 100 Index is up by 0.2 percent and the French CAC 40 Index is up by 0.3 percent.

In commodities trading, crude oil futures are sliding $0.60 to $96.71 a barrel after climbing $0.30 to $97.31 a barrel on Thursday. Gold futures are falling $19.80 to $1,615.70 an ounce. In the previous session, gold dropped by $9.60 to $1,635.50 an ounce.

On the currency front, the U.S. dollar is trading at 93.43 yen compared to the 92.88 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.3360 compared to yesterday's $1.3362.

by RTTNews Staff Writer

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