The major U.S. index futures are pointing to a higher opening on Friday, with stocks likely to get ample support from the strong fourth quarter GDP growth reported by the government earlier in the day. The uneasiness experienced by the traders over the economic recovery manifested itself in the form a steep sell-offs in the markets in recent sessions. Consequently the major averages fell below the uptrending channel seen since March 2008.
Although the GDP data is not 'the ultimate evidence' that things are going to be alright going forward, it may temporarily remove some anxiety and prod traders to pick up stocks at their current oversold levels. Earnings have been encouraging, another factor that could help a revival in sentiment.
U.S. stocks opened Thursday's session little changed, but they began steadily declining in early trading, as a smaller than expected increase in durable goods orders and a smaller than expected decline in the weekly jobless claims along with downbeat forecasts by some technology companies generated selling pressure. After bottoming out in early afternoon trading, the major averages snapped back some of their losses, but still closed notably lower.
The Dow Industrials ended down 42.41 points or 1.91% at a 2-1/2 month low of 10,121 and the S&P 500 Index fell 12.97 points or 1.18% to 1,085. Meanwhile, the Nasdaq Composite Index receded 42.41 points or 1.91% to end at 2,179, its lowest level since December 8th.
Twenty-four of the thirty Dow components ended the session lower, with American Express (AXP), Alcoa (AA), Caterpillar (CAT), Cisco Systems (CSCO), Hewlett-Packard (HPQ) and IBM (IBM) receding sharply. On the other hand, Procter & Gamble (PG) rose 1.43% on solid earnings, while Bank of America (BAC) and Boeing (BA) also gained over 1% each.
Among the sector indexes, the Dow Jones Transportation Average fell 2.33%, the NYSE Arca Airline Index declined 2.86% and the Dow Jones U.S. Basic Materials Average moved down 2.03%. The Philadelphia Index ended down 1.93%, while the Philadelphia Semiconductor Index, the NYSE Arca Disk Drive Index and the NYSE Arca Computer Hardware Index all lost over 3%.
On the economic front, the Commerce Department's durable goods orders report showed a 0.3% month-over-month incrwase in December compared to expectations for a 2% increase. Excluding transportation, durable goods orders climbed 0.9%, beating forecasts for a 0.4% increase. Non-defense capital goods orders, excluding aircraft orders, increased 1.3%, suggesting that business investment in equipments may see strength in the first quarter. Machinery orders and orders for primary metals showed strong growth
Commodity, Currency Markets
Crude oil futures are moving up $0.54 to $74.18 a barrel after receding $0.03 to $73.64 a barrel in Thursday's session. Gold futures, which edged down $0.90 to $1,084.80 an ounce in the previous session, are currently moving down $0.60 to $1,084.20 an ounce.
Among currencies, the U.S. dollar is trading at 90.70 yen compared to the 89.9495 yen it fetched at the close of New York trading on Thursday. At the same time, the greenback is currently valued at $1.3964 against the euro compared to yesterday's $1.3972.
Asia
The major Asian markets closed Friday's session mostly lower, with the exception of the Indian market, which advanced in a relief rally following a central bank policy announcement.
Japan's Nikkei 225 opened lower and moved sideways for the rest of the session. The index closed down 216.25 points or 2.08% at 10,198. A majority of stocks declined in the session.
Among a slew of economic reports released today, the Ministry of Internal Affairs and Communication said Japan's core consumer prices dropped 1.3% year-on-year in December compared to the 1.7% fall in the preceding month. The decline was less severe than the 1.7% decline expected by economists. The annual rate of deflation has now decelerated for the fourth straight month.
A separate report released by the agency showed that Japan's unemployment rate fell in December, confounding forecasts. The unemployment rate stood at a seasonally adjusted 5.1% in December, down from 5.2% in the previous month. Economists had expected the jobless rate to edge up to 5.3%.
Japan's industry sector continued to expand in December, although the pace of growth slowed. The Ministry of Economy, Trade and Industry announced that industrial production climbed a seasonally adjusted 2.2% in December compared to the previous month - the tenth straight monthly increase. This was below analysts' expectations for 2.5% growth following the revised 2.6% expansion in November.
Samsung Electronics reported fourth quarter results, showing a profit of 3.05 trillion won compared to a loss of 22 billion won in the same period last year. Sales rose 37% to 25.32 trillion won. Meanwhile, Toshiba reported net sales of 1.58 trillion yen for its third quarter, up 90.1 billion yen from last year, and a net loss of 10.6 billion yen. The company lowered its fiscal 2009-2010 net sales forecast to 6.4 trillion yen from 6.8 trillion yen.
Hong Kong's Hang Seng Index opened lower, but it recouped most of its losses by early afternoon trading. However, selling pressure intensified in the afternoon trading. Consequently, the index closed down 234.38 points or 1.15% at 20,122. Thirty-one of the forty-two index components closed lower, with property and finance stocks seeing marked weakness. On the other hand, retailer Li & Fung rallied over 10%, China Unicom rose over 1% and insurers also gained ground.
Australia's All Ordinaries opened unchanged and moved steadily lower for the rest of the session, closing down 100.80 points or 2.15% at 4,597. The market witnessed broad based weakness, with consumer staple, energy, financial and material stocks leading the slide.
Europe
The major European markets are trading higher on Friday after seeing weakness in the two previous sessions. The French CAC 40 Index and the German DAX Index are moving up about 1.50% each, while the U.K.'s FTSE 100 Index is advancing 1.33%.
In corporate news, Infineon Technologies reported a profit of 66 million euros for its first quarter on sales of 941 million euros. The company raised its 2010 guidance, with the company now expecting sales growth in excess of 20% along with a high single-digit combined result margin.
On the economic front, the Nationwide Building Society said the U.K. house prices rose 1.2% month-over-month in January following a 0.5% increase in December. Economists had forecast a smaller 0.3% increase. Meanwhile, consumer confidence in the U.K. improved modestly from depressed levels. The GfK NOP's U.K. consumer confidence rose to -17 in January from -19 in the previous month.
U.S. Economic Reports
The Bureau of Economic Analysis' advance estimates revealed that the U.S. GDP rose at a better than expected annual rate of 5.7% in the fourth quarter compared to the previous quarter. Economists had expected a more modest 4.7% GDP growth. The growth was the biggest in about six years.
The increase in GDP reflected positive contributions from private inventory investment, exports and personal consumption expenditures. Consumer spending rose at a 2% rate and a smaller rate of decline in inventories contributed notably to growth.
The Labor Department's employment cost index for the fourth quarter showed that the employment cost index rose 0.5% sequentially in the fourth quarter. The consensus estimates had called for a more modest 0.4% increase. Both wages and salaries as well as benefits rose at a 0.5% rate.
The results of the Institute for Supply Management-Chicago's business survey for January are scheduled to be released at 9:45 AM ET. Economists expect the business barometer index based on the survey to come in at 57.2.
The institute's index of manufacturing activity rose to 60 in December from 56.1 in November, with a reading above 50 indicating growth in the sector. The increase came as a surprise to economists, who had been expecting the index to edge down to a reading of 55.1.
A turnaround in employment contributed to the improvement in the sector, with the employment index jumping to 51.2 in December from 41.9 in November.
The Reuters/University of Michigan's final report on the consumer sentiment index for January is scheduled to be released at 9:55 AM ET. The consumer sentiment index is expected to be revised up to 73 from the mid-month of reading of 72.8.
Earnings
Arch Coal (ACI) reported fourth quarter revenues of $725.5 million, down from $729.9 million last year. The company's earnings fell to 1 cent per share from 44 cents per share last year. On an adjusted basis, the company reported net income of 11 cents per share. Analysts estimated 17 cents per share on revenues of $728.37 million.
Honeywell's (HON) fourth quarter earnings per share fell to 91 cents per share from 97 cents per share last year. Sales declined to $8.1 billion from the year-ago's $8.7 billion. The consensus estimates called for earnings of 90 cents per share on revenues of $8.15 billion. The company reaffirmed its 2010 sales guidance of $31.3 billion to $32.2 billion and earnings per share estimate of $2.20-$2.40 per share. Analysts estimate earnings of $2.41 per share on revenues of $31.82 billion.
Mattel (MAT) reported that its fourth quarter earnings of 89 cents per share on revenues of $1.96 billion. The consensus estimates had called for earnings of 68 cents per share on revenues of $1.98 billion.
Newell Rubbermaid (NWL) said its fourth quarter sales fell 2% to $1.42 billion. The company's normalized earnings were 27 cents per share, higher than 11 cents per share last year. Analysts estimated earnings of 27 cents per share on revenues of $1.41 billion. The company expects core sales growth in the low single digits in 2010 and normalized earnings of $1.35-$1.45 per share, while analysts estimate earnings of $1.47 per share.
Stocks in Focus
Microsoft (MSFT) could be in focus after it reported second quarter revenues of $19.02 billion, up 14% year-over-year. The company's earnings per share were 74 cents per share, up 57% from last year and adjusted earnings per share rose 28% to 60 cents per share. Analysts estimated earnings of 59 cents per share on revenues of $17.84 billion.
Amazon (AMZN) is likely to move to the upside after it said its fourth quarter sales rose 42% to $9.52 billion. Net income rose to 85 cents per share from 52 cents per share in the year-ago period. Analysts estimated earnings of 72 cents per share on revenues of $9.04 billion. For the first quarter, the company estimates net sales of $6.45 billion to $7 billion. The consensus estimates call for revenues of $6.36 billion.
Airgas (ARG) is likely to come under selling pressure after it reported third quarter adjusted earnings of 65 cents per share compared to 76 cents per share in the year-ago period. Sales fell 13% year-over-year to $942 million. Analysts estimated earnings of 69 cents per share on revenues of $960.71 million. For 2010, the company estimates earnings of $2.66-$2.70 per share, a reduction from its earlier estimate of $2.70-$2.80 per share. The consensus estimates call for earnings of $2.77 per share on revenues of $3.93 billion. Separately, the company announced an increase in its cash dividend by 22% to 22 cents per share.
Juniper Networks (JNPR) could gain ground after it reported preliminary fourth quarter results, predicting revenues of $941.5 million, up 2% from last year, and non-GAAP earnings of 32 cents per share, flat with last year. The Street estimates earnings of 26 cents per share on revenues of $884.81 million.
Among semiconductor equipment makers, Varian Semiconductor Equipment (VSEA) rose in Thursday's after hours session after it said its first quarter revenues rose to $141.30 million from $107.4 million. The company's net income rose to 22 cents per share from 19 cents per share last year. Analysts estimated earnings of 19 cents per share on revenues of $140.92 million.
On the other hand, KLA-Tencor (KLAC) moved lower in Thursday's after hours session after it reported second quarter non-GAAP net income of 28 cents per share compared to a loss of 12 cents per share last year. Revenues rose to $440 million from the year-ago's $397 million. Analysts estimated earnings of 27 cents per share on revenues of $437.88 million.
In the chip sector, Maxim Integrated (MXIM) could gain ground after it reported that its second quarter revenues rose 15% to $473.5 million. The company's GAAP earnings were 19 cents per share, including a charge of 5 cents per share. The consensus estimates called for earnings of 18 cents per share on revenues of $459.44 million. For the second quarter, the company expects revenues of $500 million to $520 million compared to the $448.77 million expected by analysts.
Lattice Semiconductor (LSCC) may gain ground after it said its fourth quarter revenues rose 12.2% to $55.1 million. The company reported non-GAAP net income of 5 cents per share compared to break-even results in the year-ago quarter. Analysts estimated 4 cents per share on revenues of $54.87 million. The company said it expects continued profitability in the first quarter and sequential revenue growth of 8%-12%. Analysts expect a profit of 3 cents per share on a slight sequential decline in revenues.
However, Applied Micro Circuits (AMCC) saw weakness in Thursday's after hours session after it reported that its third quarter non-GAAP net income from continuing operations was 4 cents per share on revenues of $53.7 million. Analysts estimated earnings of 4 cents per share on revenues of $52.75 million.
CA (CA) is likely to see some activity after it reported third quarter non-GAAP net income of 43 cents per share, flat with last year, and revenues of $1.13 billion, up 8% year-over-year. The results were ahead of the consensus estimates. For 2010, the company estimates revenues of $4.3 billion to $4.4 billion and non-GAAP earnings of $1.60-$1.71 per share. Analysts estimate earnings of $1.68 per share on revenues of $4.33 billion. The company also announced the election of William McCracken as the company's new CEO.
SanDisk (SNDK) could move in reaction to its announcement that its fourth quarter revenues rose 44% year-over-year to $1.24 billion. The company reported a non-GAAP profit of $1.18 per share compared to a loss of $1.59 per share last year. Analysts estimated a profit of 69 cents per share on revenues of $1.16 billion.
PMC-Sierra (PMCS) could rally after it said its fourth quarter revenues rose to $139.5 million from $120.8 million last year. On a non-GAAP basis, net income more than doubled to 17 cents per share. Analysts estimated earnings of 15 cents per share on revenues of $136.80 million.
Rambus (RMBS) is likely to see some activity after it reported that its fourth quarter revenues fell 18.1% year-over-year to $30.8 million, as the year-ago revenues included a receipt of the previously withheld royalties related to the now vacated FTC order. The company's net loss widened to 22 cents per share from 15 cents per share last year.
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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.