The major U.S. index futures are pointing to a lower opening on Friday, with stocks likely to move back to the downside after showing a substantial recovery from an early sell-off on Thursday.
Better than expected durable goods orders data may weigh on the markets, with the data adding to concerns about the Federal Reserve's asset purchase program. Recent comments from Fed officials have suggested that upbeat economic data could lead the central bank to taper stimulus program in the next few meetings.
After moving sharply lower at the start of trading on Thursday, stocks showed a substantial recovery attempt over the course of the trading day. The rebound came as upbeat housing data helped offset worries about the Federal Reserve.
The major averages climbed well off their worst levels of the day but still ended the session in the red. The Dow edged down 12.67 points or 0.1 percent to 15,294.50, the Nasdaq slipped 3.88 points or 0.1 percent to 3,459.42 and the S&P 500 dipped 4.84 points or 0.3 percent to 1,650.51.
The sell-off seen at the start of trading reflected lingering concerns about the Federal Reserve scaling back its asset purchase program as well as disappointing Chinese manufacturing data.
In Congressional testimony on Wednesday, Fed Chairman Ben Bernanke acknowledged that upbeat economic data could lead the central bank to taper its asset purchase program in the next few meetings.
Adding to the worries, the minutes of the latest Fed meeting said a number of participants expressed willingness to adjust the flow of purchases downward as early as the June meeting.
Meanwhile, a report released by Markit Economics and HSBC showed that Chinese manufacturing activity unexpectedly contracted in May.
The report showed that the purchasing managers index fell to 49.6 in May from 50.4 in April, with a reading below 50 indicating a contraction. Economists had expected the index to remain unchanged.
Nonetheless, stocks did not see much follow-through on the initial downward move, as traders still seemed reluctant to sell stocks.
The subsequent recovery by the markets was partly due to the release of a report from the Commerce Department showing that new home sales came in well above economist estimates in the month of April.
The Commerce Department said new home sales climbed 2.3 percent to a seasonally adjusted annual rate of 454,000 in April from the revised March rate of 444,000.
Economists had expected new home sales to rise to an annual rate of 425,000 compared to the 417,000 originally reported for the previous month, reflecting a 1.9 percent increase.
Before the start of trading, the Labor Department released a separate report showing a bigger than expected drop in weekly jobless claims in the week ended May 18th.
While most of the major sectors climbed well off their worst levels, significant weakness remained visible among commercial real estate stocks. Steel stocks also saw continued weakness, with the disappointing Chinese manufacturing data raised concerns about the outlook for global steel demand.
Brokerage, telecom, and railroad stocks also ended the day mostly in the red, although well off their lows for the session.
Meanwhile, computer hardware stocks showed a strong move to the upside on the day, driving the NYSE Arca Computer Hardware Index up by 2.4 percent. Hewlett-Packard (HPQ) helped to lead the hardware sector higher, with the PC giant jumping by 17.1 percent after reporting better than expected second quarter earnings and raising its full-year guidance.
Airline, housing, and healthcare provider stocks also moved higher over the course of the session, contributing to the recovery attempt by the broader markets.
Currency, Commodity Markets
Crude oil futures are sliding $0.66 to $93.59 a barrel after edging down $0.03 to $94.25 a barrel on Thursday. Gold futures, which jumped $24.40 to $1,391.80 an ounce in the previous session, are slipping $6.10 to $1,385.70 an ounce.
On the currency front, the U.S. dollar is trading at 101.38 yen compared to the 102.02 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.2924 compared to yesterday's $1.2934.
Asia
Asian stocks traded mixed on Friday, with extreme volatility in the Japanese markets keeping investors nervous.
Japan's Nikkei 225 Index rebounded sharply early in the session following the previous session's 7.3 percent plunge. The index pulled back in afternoon trading but moved back to the upside going into the close, ending the day up 128 points or 0.9 percent at 14,612.
During a speech at an International conference on the 'Future of Asia', Bank of Japan Governor Haruhiko Kuroda stressed the central bank's resolve to stem volatility through flexible market operations but said there are no targets for stock prices or foreign exchange rates.
SoftBank rose 1.3 percent after the company said it is ready to let the U.S. government have veto power over one nominee to Sprint Nextel Corp.'s board to oversee national security. Shinsei Bank jumped 6.5 percent after tumbling 15 percent yesterday, Mitsui Fudosan added 1.2 percent and Nikon jumped 4 percent.
China's Shanghai Composite index rose 0.6 percent on hopes for more market-related reforms, while Hong Kong's Hang Seng index edged down 0.2 percent to hit a four-week low on concerns over slowing Chinese growth.
Australian shares fell for the fourth straight session, with banks and resource stocks pacing the declines. The All Ordinaries Index ended the day down 77 points or 1.5 percent at 4,064.30.
Westpac led the banking sector lower with a 2 percent loss, while NAB, Commonwealth and ANZ dropped between 1.3 percent and 1.6 percent. BHP Billiton lost 1.5 percent on Chinese growth concerns, while rival Rio Tinto slid 1.1 percent.
Europe
The European markets are mixed on Friday after Germany's Ifo business confidence strengthened in May.
The key reading on German business sentiment improved to 105.7 in May from 104.4 in April, according to the report from the Ifo institute. The reading was forecast to remain unchanged at 104.4.
The assessment of current conditions rose to 110, from 107.3 a month ago, above the expected level of 107.2.
Additionally, German consumer confidence is set to strengthen in June, results of a survey by market research firm GfK showed. The forward-looking index for June rose to 6.5 in June from 6.2 in May. Economists had forecast the indicator to remain unchanged.
Detailed data from the Federal Statistical Office revealed that a rebound in consumer spending helped the German economy thwart a recession in the first quarter of 2013. However, the continued drop in firms' fixed asset investment and extreme weather conditions stifled the recovery.
U.S. Economic Reports
After reporting a sharp drop in new orders for manufactured durable goods in the previous month, the Commerce Department released a report on Friday showing that durable goods orders rebounded by more than anticipated in the month of April.
The report said durable goods orders surged up by 3.3 percent in April after tumbling by a revised 5.9 percent in March. Economists had expected orders to climb 1.1 percent compared to the 5.7 percent drop that had been reported for the previous month.
Excluding a rebound in orders for transportation equipment, durable goods orders rose by 1.3 percent in April compared to a 1.7 percent drop in March.
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June 12, 2026 17:14 ET Major central bank action was the focus this week in economic news. The European Central Bank became the first major central bank to move in response to the rising inflationary pressures in the backdrop of the conflict in the Middle East. In North America, the U.S. inflation and trade data as well as Canada’s central bank decision gained attention. The Chinese trade data was the main news in Asia.