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Stocks May Show Another Early Move To The Downside - U.S. Commentary

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Stocks may move to the downside in early trading on Friday after closing higher for five consecutive sessions. The major index futures are currently pointing to a lower open for the markets, with the Dow futures down by 80 points.

Profit taking may contribute to initial weakness on Wall Street along with concerns about the ongoing government shutdown and skepticism about a potential trade deal between the U.S. and China.

Stocks managed to recover from an early downward move on Thursday, however, as recent upward momentum helped the major averages extend their recent winning streak.

Early trading may be impacted by reaction to a report from the Labor Department showing a slight drop in consumer prices in the month of December.

The Labor Department said its consumer price index slipped by 0.1 percent in December after coming in unchanged in November. The slight drop in consumer prices matched economist estimates.

Energy prices showed another significant decrease during the month, plunging by 3.5 percent in December following a 2.2 percent slump in the previous month.

A steep drop in gasoline prices led the way lower, with gas prices plummeting by 7.5 percent in December after tumbling by 4.2 percent in November.

On the other hand, the report said food prices climbed by 0.4 percent in December, the largest increase since May of 2014. Prices for fruits and vegetables surged higher.

Excluding food and energy prices, the core consumer price index rose by 0.2 percent in December, matching the increases seen in the two previous months as well as expectations.

Higher prices for shelter, recreation, medical care, and household furnishings and operations more than offset lower prices for airline fares, used cars and trucks, and motor vehicle insurance.

The report said the annual rate of consume price growth slowed to 1.9 percent in December from 2.2 percent in November, while the annual rate of core consumer price growth was unchanged at 2.2 percent.

After recovering from an early move to the downside, stocks moved mostly higher over the course of the trading day on Thursday. With the turnaround on the day, the major averages closed higher for the fifth consecutive session.

The major averages ended the day just off their highs of the session. The Dow advanced 122.80 points or 0.5 percent to 24,001.92, the Nasdaq rose 28.99 points or 0.4 percent to 6,986.07 and the S&P 500 climbed 11.68 points or 0.5 percent to 2,596.64.

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Friday. Japan's Nikkei 225 Index jumped by 1 percent, while Hong Kong's Hang Seng Index climbed by 0.6 percent.

Meanwhile, the major European markets have moved to the downside on the day. While the U.K.'s FTSE 100 Index has fallen by 0.4 percent, the German DAX Index and the French CAC 40 Index are sliding by 0.7 percent and 0.8 percent, respectively.

In commodities trading, crude oil futures are slipping $0.36 to $52.23 a barrel after rising $0.23 to $52.59 a barrel on Thursday. Meanwhile, after falling $4.60 to $1,287.40 an ounce in the previous session, gold futures are climbing $4.90 to $1,292.30 an ounce.

On the currency front, the U.S. dollar is trading at 108.17 yen compared to the 108.43 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.1528 compared to yesterday's $1.1500.

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