The major U.S. index futures are pointing to a mixed opening on Friday, with sentiment still hurt by apprehension that stringent financial regulations will eat into profitability of banks. That said, earnings news has been rather upbeat, signaling that corporate profits may be on their way towards a sustainable recovery. The risk aversion following the 2-day slide in the markets has supported safe haven currencies such as the dollar and the yen, sending commodities lower. Amid this backdrop and in the absence of any key economic report, the major averages may fight to hold key support levels.
After showing some indecision in early trading on Thursday amid the release of a disappointing jobs report, the major U.S. averages fell sharply in early trading. A muted economic outlook and financial regulatory measures announced by President Barack Obama sent traders scurrying out of the markets. Thereafter, stocks moved sideways to end the session notably lower, the second straight session of sharp declines.
The Dow Industrials retreated further from the multi-month hit on Tuesday and settled down 213.27 points or 2.01% at 10,390, representing its lowest level in more than a month. Twenty-eight of the thirty Dow components ended the session lower, with Alcoa (AA) (down 6.43%), Bank of America (BAC) (down 6.19%), Caterpillar (CAT) (down 4.87%) and JP Morgan Chase (JPM) (down 6.59%) leading the slide.
While the Nasdaq Composite Index receded 25.55 points or 1.12% to 2,266, the S&P 500 Index closed down 21.56 points or 1.89% at 1,117. The S&P 500 Index closed just short of its 50-day moving average of 1,114.61.
Among the sector indexes, the Dow Jones U.S. Basic Materials Average slumped 4.59%, the NYSE Arca Gold Bugs Index slipped 4.44% and the Philadelphia Housing Sector Index declined 3.72%. The NYSE Arca Biotechnology Index, the NYSE Arca Oil Index and the NYSE Arca Airline Index all lost over 2%. On the other hand, the NYSE Arca Disk Drive Index gained 1.45%.
On the economic front, the initial jobless claims report showed an increase in claims to 482,000 in the week ended January 16th compared to 446,000 in the previous week, rising to the highest level since mid-November. However, the surge was attributed to a backlog in processing claims from prior weeks. Continuing claims fell by 18,000 in the week ended January 9th to 4.599 million.
The results of the Philadelphia Fed's manufacturing survey showed that its manufacturing index fell to 15.2 in January from 22.5 in December. The new orders index dipped 5.1 points to 3.2, while the employment index rose 1.6 points to 6.1. The inventories index, although improving to -1.6 from the previous month's -5.7, remained in negative territory. The 6-month outlook index rose to 43.3 from 35.9.
The Conference Board said its U.S. leading economic indicators index for the U.S. rose 1.1% in December following a 1% increase in November and a 0.3% rise in October. With this, the index has risen steadily for nine consecutive months. While the coincident economic index rose 0.1%, the lagging index fell 0.2%.
Commodity, Currency Markets
Crude oil futures are edging down $0.17 to $75.91 a barrel after declining $1.66 to $76.08 a barrel in Thursday's session. Yesterday's decline came amid the release of the weekly oil inventory report, which showed that crude oil inventories edged down by 0.4 million barrels to 330.6 million barrels. Inventory levels of crude oil were above the upper level of the average range.
Distillate stockpiles declined by 3.3 million barrels, but yet remained above the upper boundary of the average range. On the other hand, gasoline inventories rose by 3.9 million barrels and were above the upper limit of the average range. Refinery capacity utilization averaged 80% over the four-weeks ended January 15th compared to 80.4% in the previous week.
Gold futures are currently sliding $7.80 to $1,095.40 an ounce. In the previous session, the precious metal fell $9.40 to $1,103.20 an ounce.
On the currency front, the U.S. dollar is weakening to 90.147 yen from the 90.4305 yen it fetched at the close of New York trading on Thursday. The dollar is currently valued at $1.4131 versus the euro.
Asia
The major Asian averages ended Friday's session lower across the board, impacted by the negative close on Wall Street overnight. The Japanese, South Korean and Taiwanese markets closed down over 2%.
Japanese Nikkei 225 average opened lower and declined steadily in the morning before moving sideways for the rest of the session. The index closed down 277.86 points or 2.56% at 10,591. The market reeled under broad based weakness, with a variety of sectors witnessing selling pressure.
A report released by Japan's Ministry of Economy, Trade and Industry showed that Japan's all industry activity rose 0.1% month-over-month in November following a revised 1.1% increase in October. Industrial output rose 2.2% and the index for construction activity climbed 1.8%, while the tertiary industry activity index edged down 0.2%. Annually, the all industry activity index declined 3.5%, slower than the 6.5% drop in October.
Australia's All Ordinaries declined for the second straight day, with the index opening slightly lower and dipping sharply in early trading. Thereafter, the index moved sideways to close down 77.70 points or 1.60% at 4,772. The sector indexes for energy and material stocks declined over 200 points on a day when most sectors showed weakness.
Trade data from Australia showed that Australia's import price index fell 4.3%sequentially in the fourth quarter, with the decline mainly due to the Australian dollar's strength. The export price index was down 1.7%.
Hong Kong's Hang Seng Index languished in negative territory throughout the session, although the index recouped some of its losses in late trading. The index closed down 136.49 points or 0.65% at 20,726. Thirty-two of the forty-two index components closed the session lower.
Europe
Bank stocks are leading the slide in Europe on Friday, with the major averages in the region trading lower. The French CAC 40 Index and the German DAX Index are moving down 1.10% and 0.81%, respectively, while the U.K.'s FTSE 100 Index is declining 0.83%.
In corporate news, Sony Ericsson, a joint venture between Sony (SNE) and Ericsson (ERIC), reported a fourth quarter loss of 167 million euros compared to a loss of 187 million euros last year. Sales fell 40% to 1.75 billion euros. The company's mobile phone shipments fell 40% to 14.5 million.
On the economic front, a report released by INSEE showed that French industrial confidence rose to its highest level since September 2008 in January. The business confidence indicator rose to 92 in January from 88 in December, higher than the economists' estimate of 90. The Office for National Statistics reported that U.K. retail sales rose 0.3% in December compared to the previous month, while the expected increase was 1.1%. Retail sales volume was 2.1% higher than in December 2008, softer than the consensus estimate for 3% growth. Industrial new orders rose 1.6% year-over-year in November following a revised decrease of 1.9% in October, according to a report released by Eurostat. Economists had forecast a 0.5% increase. On an annual basis, orders were down 1.5% compared to October's revised fall of 14.4%. Earnings
General Electric (GE) said its fourth quarter earnings from continuing operations attributable to common shareowners fell to 28 cents per share from 36 cents per share last year. Revenues fell 10% to $41.44 billion. Analysts estimated earnings of 26 cents per share on revenues of $40.02 billion.
Johnson Controls (JCI) reported that its first quarter revenues rose 15% year-over-year to $8.4 billion. The company reported non-GAAP earnings of 43 cents per share. Analysts estimate earnings of 29 cents per share on revenues of $7.49 billion. The company raised its 2010 revenue guidance to $33 billion from $31 billion estimated previously. The company also improved upon its 2010 earnings per share guidance to $1.70-$1.75 from $1.35-$1.45. Analysts estimate earnings of $1.52 per share on revenues of $31.14 billion.
Among banks, Sun Trust Banks (STI) reported a fourth quarter net loss available to common shareholders of 64 cents per share compared to a loss of $1.07 per share last year. Revenues were almost flat at $1.95 billion. Analysts estimated a loss of 75 cents per share on revenues of $2.06 billion.
BB&T Corp. (BBT) said its fourth quarter net income totaled 27 cents per share, lower than 51 cents per share last year, but higher than the consensus estimate of 21 cents per share. Fully taxable net interest income totaled $1.36 billion, up 24.5% year-over-year.
Schlumberger's (SLB) fourth quarter income from continuing operations fell to 67 cents per share compared to $1.03 per share in the year-ago period. Revenues were $5.74 billion, lower than $6.87 billion last year. Analysts estimated earnings of 64 cents per share on revenues of $5.45 billion.
McDonald (MCD) reported fourth quarter earnings per share of $1.11, including an 8 cents per share benefit, compared to 87 cents per share last year. Revenues rose 7% year-over-year to $5.97 billion. Analysts estimated earnings of $1.02 per share on revenues of $5.94 billion.
Stocks in Focus
Google (GOOG) came under selling pressure in Thursday's after hours session despite reporting fourth quarter revenues of $6.67 billion, up 17% year-over-year. Revenues, excluding $1.72 billion in traffic acquisition costs, were $4.95 billion. On a non-GAAP basis, the company reported earnings of $6.79 per share, higher than the year-ago's $5.10 per share. Analysts estimated earnings of $6.50 per share on revenues of $4.92 billion.
AMD (AMD) receded in Thursday's after hours session after it reported a fourth quarter adjusted loss of 8 cents per share compared to the loss of 18 cents per share estimated by analysts. Revenues rose 42% year-over-year to $1.6 billion, ahead of the consensus estimate. The company expects first quarter sales to show a sequential decline.
American Express (AXP) may also be in focus after reporting fourth quarter earnings that rose to 60 cents per share from 21 cents per share last year. The company's adjusted earnings from continuing operations were 59 cents per share compared to the 57 cents per share consensus estimate. Revenues fell to $6.49 billion from $6.51 billion last year.
NRG Energy (NRG) may gain ground after Standard & Poor's announced that the company would replace Sun Microsystems (JAVA) in the S&P 500 Index after the close of trading on a date to be announced. Sun has agreed to be acquired by Oracle (ORCL) and the deal is pending for want of final approvals.
Cablevision (CVC) is likely to see some activity after the company announced along with Scripps Networks (SNI) that they have reached an agreement allowing the return of Food Network and HGTV programming to Cablevision customers in the New York tri-state region beginning Thursday afternoon. The companies did not announce the terms of the agreement.
Finish Line (FINL) could gain ground after it announced an increase in its quarterly cash dividend to 4 cents per share from 3 cents per share of its outstanding Class A and Class B common stock.
Consolidated Edison (ED) receded in Thursday's after hours session after it reported that its fourth quarter earnings from ongoing operations fell to 67 cents per share from 72 cents per share last year. Analysts estimated earnings of 76 cents per share. The company also announced a quarterly dividend of 59.5 cents per share, which translates to an annualized dividend of $2.36 per share, up 2 cents from last year.
Pall (PLL) could move to the upside after it announced an increase in its quarterly dividend to 16 cents per share, up 10.3% from the previous quarter.
Burlington Northern Santa Fe (BNI) may be in focus after it announced that its fourth quarter earnings were $1.55 per share, including a tax benefit of 25 cents per share, compared to earnings of $1.78 per share last year. Revenues fell 16% to $3.57 billion. The consensus estimates had called for earnings of $1.22 per share on revenues of $3.62 billion. Analysts' estimates typically exclude one-time items. Separately, the company also unveiled a planned capital commitment program of $2.4 billion, which is down $240 million from 2009 due to fewer expected locomotive acquisitions in 2010.
Conexant Systems (CNXT) could see upside after it reported that its first quarter revenues were $61.8 million compared to $57.46 million last year. The company's non-GAAP core income from continuing operations was 17 cents per share compared to a loss of 2 cents per share last year. Analysts estimated earnings of 11 cents per share on revenues of $60.10 million. For the second quarter, the company expects core net income of 13-14 cents per share on revenues of $60 million to $61 million. The consensus estimates call for earnings of 8 cents per share on revenues of $54.90 million.
Capital One Financial (COF) is likely to see some activity after it reported fourth quarter net income from continuing operations of 89 cents per share compared to a loss of $3.67 per share last year. Total revenues rose to $3.37 billion from $3.17 billion last year. Analysts, on average, expected earnings of 45 cents per share on $4.30 billion.
Emulex (ELX) may move in reaction to its announcement that its second quarter net revenues came in almost flat with its year-ago results at $108.3 million. The company's non-GAAP net income per share was 18 cents per share, down 22% from last year. The consensus estimates called for earnings of 16 cents per share on revenues of $104.10 million. For the third quarter, the company estimates non-GAAP earnings per share of 16-18 cents per share on net revenues of $100 million to $103 million. Analysts estimate earnings of 14 cents per share on revenues of $100.32 million.
Western Digital (WDC) is likely to see some activity after it reported second quarter revenues of $2.6 billion, up from $1.82 billion last year. The company's earnings improved to $1.85 per share from 6 cents per share in the year-ago period. The consensus estimates called for earnings of $1.36 per share on revenues of $2.35 billion.
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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.