The major U.S. index futures are pointing to a slightly lower opening on Friday despite expectations that bargain hunting will support the markets following three straight sessions of losses. Economic data released from across the Atlantic were encouraging, with most economies in the euro zone region reporting forecast-beating economic growth for the second quarter. However, a Commerce Department report released earlier in the day showed that retail sales in the U.S. rose slightly less than economists' expectations.
The inner details of the report were largely negative, with most retail categories showing softness. The data is likely to stir concerns about consumer spending and against this backdrop, the consumer sentiment report to be released shortly after the markets open assumes importance.
U.S. stocks extended their losses on Thursday, as economic data released during the day did little to improve sentiment. The major averages opened lower and saw a volatile ride throughout the session, although they remained below the unchanged line throughout the session before ending moderately lower. A report showing an unexpected increase in weekly jobless claims aggravated the negativity concerning the sustainability of the economic recovery.
The Dow Industrials ended 58.88 points or 0.57% lower at 10,320 and the Nasdaq Composite fell 18.36 points or 0.83% to 2,190, while the S&P 500 Index closed down 5.86 points or 0.54% at 1,084.
Nineteen of the thirty Dow components closed lower, with Cisco (CSCO) (down 9.99%) leading the slide. Wal-Mart (WMT), Microsoft (MSFT), IBM (IBM), Hewlett-Packard (HPQ), General Electric (GE), Boeing (BA) and American Express (AXP) also saw steep losses. On the other hand, Verizon (VZ) (up 2.57%), Travelers Co. (TRV) (up 1.37%) and Pfizer (PFE) (down 1.25%) saw notable buying interest.
Among the sector indexes, the Philadelphia Housing Sector Index declined 1.81%, the Philadelphia Semiconductor Index fell 1.31%, the NYSE Arca Disk Drive Index moved down 4.41%, the NYSE Arca Computer Hardware Index lost 2.92%, the NYSE Arca Software Index receded 1.39% and the NYSE Arca Networking Index slumped 3.69%. However, the NYSE Arca Biotechnology Index rose 1.30% and the NYSE Arca Gold Bugs Index added 2.11%.
Currency, Commodity Markets
Crude oil futures are trading up $0.24 to $75.98 a barrel after the commodity extended its declines on Thursday, when it lost $2.28 to $75.74 a barrel. Gold futures are currently trading down $1.50 at $1,215.20 an ounce. In the previous session, gold rose $17.50 to $1,216.70 an ounce.
On the currency front, the U.S. dollar is trading at 85.84 yen compared to the 85.9025 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is trading at $1.2822 compared to yesterday's $1.283.
Asia
The major Asian markets closed Monday's session higher following losses in the previous three sessions. Bargain hunting amid the return of risk appetite led to the gains.
Japan's Nikkei 225 average languished mostly below the unchanged line in the morning before recovering in the afternoon to close up 40.87 points or 0.44% at 9,254. Heavy equipment makers and most other technology stocks advanced, while auto stocks showed mixed sentiment. On the other hand, financial stocks ended mostly lower.
Australia's All Ordinaries opened with some caution before moving decisively higher in early trading. The index traded with a modest gain until the afternoon and advanced thereafter to close up 58.50 points or 1.32% at 4,481. Material and energy stocks rallied strongly in the session.
Hong Kong's Hang Seng Index showed volatility throughout the session before closing down 34.14 points or 0.16% at 21,072. Property and utility stocks showed marked weakness, while China-related stocks ended mostly higher.
Europe
The major European markets have surrendered their early gains and are currently trading below the unchanged line. The French CAC 40 Index and the German DAX Index are currently receding 0.63% and 0.38%, respectively, while the U.K.'s FTSE 100 Index is moving down 0.17%. The declines are despite the economies in the region reporting better than expected GDP growth for the second quarter.
U.S. Economic News
With energy prices showing a significant increase in the month of July, the Labor Department released a report showing that consumer prices for the month increased by a little more than economists had been anticipating.
The Labor Department said its consumer price index rose by 0.3 percent in July after edging down by 0.1 percent in June. Economists had been expecting the index to increase by 0.2 percent.
Core prices, which exclude food and energy prices, inched up by 0.1 percent in July following a 0.2 percent increase in the previous month. The modest increase in core prices met economist estimates.
A report released by the Commerce Department showed that retail sales rose 0.4% month-over-month in July, slightly lesser than the 0.5% increase expected by economists. June's data was revised to show a more modest decline of 0.3%. Excluding auto sales, retail rose 0.2%, in line with expectations. On a year-over-year basis, retail sales and retail sales, excluding autos, were up 5.5% and 4.9%, respectively.
The increase in the headline number was helped by a 1.6% rebound in auto sales, which reversed the 1.3% decline in the previous month. Gasoline sales climbed 2.3%, reversing the 2% drop in the previous month. However, most other categories showed sales declines.
Gasoline sales declined 2%, while sales decline at building material & garden equipment store sales slowed to 1.1% from the 9% drop in the previous month. On the other hand, sales at electronics & appliance stores, general merchandise stores and miscellaneous retail stores increased.
The preliminary report of the Reuters/University of Michigan's consumer sentiment survey for August is scheduled to be released at 9.55 AM ET. The consumer sentiment index is expected to increase to 70 from July's 67.80.
The Commerce Department is scheduled to release its business inventories report for June at 10 AM ET. The report summarizes the results from the monthly retail trade, wholesale trade and factory goods orders surveys. The report is expected to show a 0.2% increase in business inventories for the month.
Business inventories rose 0.1% month-over-month in May, slightly softer than the 0.2% increase expected by economists. However, business sales declined by 0.9%, resulting in an increase in the inventories to sales ratio to 1.24 from 1.23 in April.
Stocks in Focus
Earnings
Nvidia (NVDA) reported a GAAP loss of 25 cents per share for its second quarter compared to a loss of 19 cents per share last year. The company's revenues rose to $811.2 million from $776.5 million last year. Excluding a charge, the company's earnings would have been 3 cents per share. Analysts estimated earnings of 11 cents per share on revenues of $831.88 million. For the third quarter, the company expects revenues to show 3%-5% sequential growth, translating to revenues of $835.54 million to $851.76 million, while analysts estimate revenues of $884.08 million.
Nordstrom (JWN) said its second quarter earnings rose to 66 cents per share from 48 cents per share last year. Net sales rose to $2.52 billion from the year-ago's $2.23 billion. Analysts estimated earnings of 66 cents per share on revenues of $2.40 billion. The company maintained its 2010 earnings per share outlook of $2.50-$2.65, while analysts estimate earnings of $2.62 per share.
Autodesk (ADSK) reported that its second quarter non-GAAP revenues increased to 36 cents from 24 cents per share last year. Revenues rose 14% to $473 million. The results were ahead of the consensus estimates. The company expects third quarter non-GAAP earnings of 28-33 cents per share and revenues of $450 million to $475 million. The Street estimates earnings of 30 cents per share on revenues of $463.78 million. The company also said it expects non-GAAP operating margin to increase by 400-450 basis points in 2011.
DeVry (DV) reported that its fourth quarter earnings nearly double to 99 cents per share and revenues rose 28% to $506.7 million. The consensus estimates called for earnings of 82 cents per share on revenues of $487.18 million.
Other Corporate News
Oracle (ORCL) could be in focus after it said it has filed a complaint against Google (GOOG) for patent and copyright infringement. Oracle claimed that Google infringed on Java-related intellectual property while developing Android system to mobile phones.
Another stock that could move in reaction to a lawsuit is Eli Lilly (LLY), which said a U.S. district court has ruled against the company's patent litigation for Strattera. The company said it would appeal this decision. With the ruling paving way for the entry of generic versions of the drug into the market, the company lowered its revenue guidance for 2010 and now expects revenue growth in the low-to-mid-single digits compared to its earlier guidance of mid-single digits. However, the company said earnings are unlikely to be impacted.
Barnes & Noble (BKS) could see some activity after Yucaipa, the firm run by billionaire Ron Burkle, expressed disappointment with a Delaware court ruling that the poison pill invoked by the bookseller is legal. Yucaipa said it has decided to take the message directly to the company's shareholders at the upcoming 2010 Annual Meeting.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.