Plus   Neg

Markets May Continue To Benefit From Bargain Hunting

The major U.S. index futures are pointing to a higher opening on Friday following the rebound seen in the previous session. The markets may continue to benefit from bargain hunting, as stocks remain at relatively low levels following the sell-off seen on Wednesday.

A lack of major U.S economic data may keep some traders on the sidelines, however, although remarks by a pair of Federal Reserve officials are likely to attract some attention.

After recovering from an early move to the downside, stocks moved mostly higher over the course of the trading session on Thursday. With the upward move on the day, the major averages partly offset the steep losses posted on Wednesday.

The major averages ended the day firmly in positive territory but off their highs of the session. The Dow rose 56.09 points or 0.3 percent to 20,663.02, the Nasdaq advanced 43.89 points or 0.7 percent to 6,055.13 and the S&P 500 climbed 8.69 points or 0.4 percent to 2,365.72.

Bargain hunting contributed to the strength on Wall Street after the weakness seen early in the day pulled the major averages down to their lowest intraday levels in almost a month.

Traders may have felt yesterday's sell-off was overdone amid lingering optimism President Donald Trump can implement his pro-business policy agenda despite recent political turmoil.

In the latest developments in Washington, Deputy Attorney General Rod Rosenstein appointed former FBI Director Robert Mueller to serve as Special Counsel to oversee an investigation of Russian meddling in last year's presidential election.

Rosenstein said public interest requires him to place the investigation under the authority of a person who exercises a degree of independence from the normal chain of command.

The move comes on the heels of reports Trump asked former FBI Director Comey to drop a federal investigation into links between former National Security Adviser Michael Flynn and Russia.

The rebound on Wall Street also came following the release of some upbeat economic data, including a report from the Labor Department showing another unexpected drop in initial jobless claims in the week ended May 13th.

The report said initial jobless claims edged down to 232,000, a decrease of 4,000 from the previous week's unrevised level of 236,000. Economists had expected jobless claims to rise to 240,000.

A separate report from the Philadelphia Federal Reserve showed that regional manufacturing activity has unexpectedly expanded at a faster pace in the month of May.

The Philly Fed said its index for current manufacturing activity in the region climbed to 38.8 in May from 22.0 in April, with a positive reading indicating growth. The index had been expected to dip to 19.5.

The Conference Board also released a report showing that its index of leading economic indicators rose by 0.3 percent in April, matching expectations.

After turning in some of the market's worst performances in the previous session, semiconductor stocks showed a strong move back to the upside. The Philadelphia Semiconductor Index surged up by 1.9 percent after plunging by 4.4 percent on Wednesday.
Biotechnology stocks also regained ground after Wednesday's sell-off, with the NYSE Arca Biotechnology Index climbing by 1.4 percent. Achillion Pharmaceuticals (ACHN) led the sector higher after an upgrade by Leerink Partners.

Oil service, trucking, and retail stocks also moved notably higher on the day, partly offsetting the steep losses posted in the previous session.

On the other hand, gold stocks pulled back after bucking the downtrend on Wednesday, dragging the NYSE Arca Gold Bugs Index down by 2.8 percent. The drop by the index came after it ended the previous session at its best closing level in almost a month.

Steel stocks also saw significant weakness, extending Wednesday's sell-off. The NYSE Arca Steel Index slump by 2.6 percent to a six-month closing low.

Commodity, Currency Markets

Crude oil futures are climbing $0.61 to $49.96 a barrel after rising $0.28 to $49.35 a barrel on Thursday. Meanwhile, after sliding $5.90 to $1,252.80 an ounce in the previous session, gold futures are inching up $0.60 to $1,253.40 an ounce.

On the currency front, the U.S. dollar is trading at 111.26 yen compared to the 111.49 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.1179 compared to yesterday's $1.1103.


Asian stocks recovered from early losses to end mixed on Friday as better-than-expected U.S. economic data and higher oil prices offset concerns surrounding deepening political turmoil in Washington and Brazil.

Brazil's real, stocks and bonds tumbled as President Michel Temer faced calls for impeachment in the wake of a corruption scandal. Temer said he would not resign and would prove his innocence in the Supreme Court.

China's Shanghai Composite Index ended at 3,090.93, up just 0.79 points or 0.03 percent, after official data showed foreign direct investment into China decreased 4.3 percent from last year in April. However, the index rose 0.2 percent for the week to snap a five-week losing streak. Hong Kong's Hang Seng Index crept up 38.35 points or 0.15 percent to 25,174.87.

Japanese shares closed modestly higher even as the dollar edged lower after a modest recovery overnight. The Nikkei 225 Index closed up 36.90 points or 0.19 percent at 19,590.76 but ended the week down about 1.5 percent. The broader Topix Index closed 0.30 percent higher at 1,559.73.

Financial stocks saw some bargain hunting after recent heavy losses, with Mitsubishi UFJ Financial, Mizuho Financial and Sumitomo Mitsui Financial all ending up over 1 percent.

Takata Corp soared 20 percent after four automakers agreed to pay $553 million to settle with owners of vehicles for losses linked to defective Takata airbag inflators.

Toshiba rallied 3.3 percent on a Nikkei report that U.S. private equity firm Bain Capital is preparing to tender a bid for a 51 percent stake in its memory chip unit.

Meanwhile, Australian stocks extended losses from the previous session as banks saw further downside, offsetting gains in the material sector.

The benchmark S&P/ASX 200 Index dropped 10.90 points or 0.19 percent to 5,727.40, taking the weekly loss to 1.9 percent. The broader All Ordinaries Index slipped 6.60 points or 0.11 percent to finish at 5,768.90.

The big for banks fell between 0.6 percent and 1.9 percent on concerns over the proposed tax and overheated property markets.

Gold miners Newcrest, Northern Star and Regis Resources shed 1-3 percent after a bounce in the dollar weighed on gold prices overnight. Origin Energy lost 1.8 percent after it agreed to sell a gas pipeline network in Australia for A$392 million ($291 million).

Meanwhile, miners bucked the weak trend, with BHP Billiton and Rio Tinto rising 1-2 percent, while smaller rival Fortescue Metals Group soared 5.7 percent.


European stocks are recovering from the heavy losses suffered earlier this week as oil is moving higher for the third straight session and strong U.S. economic data helped investors put Trump worries on the back burner.

The Trump administration took the first step toward renegotiating the North American Free Trade Agreement, helping ease concerns over the president's ability to deliver on his economic agenda.

Meanwhile, Greek lawmakers approved a reforms package that includes pension cuts and tax hikes as demanded by the country's lenders in return for unlocking another tranche of bailout funds and to start discussions over debt relief.

The parliament nod came ahead of the Eurogroup meeting on May 22nd, when euro area finance ministers will consider disbursement of the bailout funds and discuss debt relief.

While the German DAX Index has risen by 0.2 percent, the U.K.'s FTSE 100 Index and the French CAC 40 Index are up by 0.4 percent and 0.5 percent, respectively.

French telecom giant Orange has risen after it entered into exclusive negotiations to acquire a controlling stake in Business & Decision.

Danone shares have also advanced on news the food group is targeting an operating margin of above 16 percent in 2020.

Biopharmaceutical firm Shire Plc has moved higher after saying it will highlight new research on the treatment of chronic hypoparathyroidism at the upcoming 19th Annual Meeting of the European Congress of Endocrinology in Portugal.

Swiss-based travel retailer Dufry has soared after Richemont bought a 5 percent stake in the company. Food group Aryzta has also rallied after appointing Dublin Airport Authority Chief Executive Kevin Toland as its new chief executive.

Meanwhile, Hikma Pharma has come under pressure as the drug maker cut its full-year revenue forecasts, citing delays to the approval of its generic version of GlaxoSmithKline's (GSK) asthma drug.

On a light day on the economic front, figures from Destatis showed that German producer prices increased at the fastest pace since late 2011 in April.

Separately, data from the European Central Bank revealed that the euro area current account surplus fell to a seasonally adjusted 34.1 billion euros in March from a record 37.8 billion euros in February, largely due to a widening shortfall on secondary income.

U.S. Economic Reports

At 9:15 am ET, St. Louis Federal Reserve President James Bullard is due to give a presentation on the U.S. economy and monetary policy before the Association for Corporate Growth St. Louis Chapter.

San Francisco Federal Reserve Bank President John Williams is scheduled to speak about the view from a policy maker at El Camino High School in San Francisco at 1:40 pm ET.

Stocks in Focus

Shares of Autodesk (ADSK) are moving sharply higher in pre-market trading after the design software maker reported a narrower than expected first quarter loss on revenues that beat estimates.

Apparel retailer Gap (GPS) is also likely to see early strength after reporting first quarter results that exceeded expectations and raising its first-half guidance.

Shares of Ross Stores (ROST) may also move to the upside after the discount retailer reported better than expected first quarter results and boosted its full-year forecast.

Heavy equipment maker Deere (DE) also reported better than expected second quarter earnings and provided upbeat guidance for the full year.

Meanwhile, shares of Foot Locker (FL) are likely to come under pressure after the athletic apparel and footwear retailer reported first quarter results that came in below analyst estimates.

Soup maker Campbell Soup (CPB) may also see early weakness after reporting fiscal third quarter results that missed estimates and lowering its full-year sales guidance.

Shares of Halozyme Therapeutics (HALO) are moving sharply lower in pre-market trading after the biotechnology company priced an offering of 10 million shares of its common stock at $12.50 per share.

by RTTNews Staff Writer

For comments and feedback: editorial@rttnews.com

Follow RTT