The major U.S. index futures are pointing to a lower opening on Friday, reflecting the increasing uncertainty among traders amid a lack of any major catalysts. The major averages have violated their respective 50-day moving averages to their downside and they may find difficulty breaking above this key level, especially with the uncertainty weighing in the minds of traders and ahead of the weekend.
U.S. stocks turned south on Thursday after the rebound seen in the previous two sessions, as disconcerting economic data weighed on sentiment. The major U.S. averages opened lower and fell sharply in early trading. Although the selling pressure had abated by late morning trading, the major averages continued to decline until the afternoon after which the markets witnessed some degree of consolidation around the lower levels.
The Dow Industrials ended down 144.33 points or 1.39% at 10,271 and the Nasdaq Composite Index receded 36.75 points or 1.66% to end at 2,179. Meanwhile, the S&P 500 Index closed 18.53 points or 1.69% lower at 1,076.
All thirty of the Dow components closed lower, with Intel (INTC), Alcoa (AA), Boeing (BA), Bank of America (BAC), DuPont (DD), Disney (DIS), General Electric (GE), Home Depot (HD), JP Morgan (JPM), 3M Co. (MMM) and United Technologies (UTX) slipping over 2% each.
Among the sector indexes, the NYSE Arca Airline Index declined 3.78% and the Dow Jones Transportation Average receded 2.39%. The Philadelphia Housing Sector Index fell 2.50%, the KWB Bank Index receded 2.58%, the NYSE Arca Securities Broker/Dealer Index slipped 2.17% and the NYSE Arca Biotechnology Index lost 2.63%. In the resource space, the Dow Jones U.S. Basic Materials Average moved down 2.11% compared to a 2.25% drop by the Philadelphia Oil Service Index. In the technology space, the NYSE Arca Disk Drive Index lost 2.20%.
On the economic front, initial claims for unemployment benefits rose to 500,000 in the week ended August 14th from an upwardly revised 488,000 for the previous week, with the half a million claim levels reached for the first time since November 2009. Economists had expected a decline in the number of individuals claiming unemployment benefits to 478,000. Meanwhile, continuing claims declined 13,000 to 4.478 million. The data points to a pick up in the rate of layoffs after the stabilization witnessed in recent weeks.
The results of the Philadelphia Fed's manufacturing survey showed that its manufacturing index fell to -7.7 in August from 5.1 in July. Economists had expected an increase by the index to 7. Most sub-indexes, with the exception of the prices paid index, were negative. The new orders index declined 3 points to -7.1, the lowest level since June 2009, and the backlog orders index fell 3 points. The employment index came in at -2.7, down 4 points from the month-ago level and marking the weakest since October 2009. The inventories index fell a steep 15 points to -11.6.
The Conference Board's leading indicators index rose 0.1% month-over-month in July, with the increase coming about due to the steep yield curve, a lengthier workweek and a decline in claims. The coincident index and the lagging index also increased, rising by 0.2% and 0.4%, respectively.
Currency, Commodity Markets
Crude oil futures are trading down $0.89 at $74.33 a barrel after declining $0.99 to $74.43 a barrel on Thursday. Gold futures are currently slipping $3.30 to $1,233.90 a barrel. In the previous session, gold futures rose $4 to $1,235.40 a barrel.
Among currencies, the U.S. dollar is trading at 85.425 yen compared to the 85.391 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.2711 compared to yesterday's $1.2823.
Asia
The major Asian markets closed Friday's session lower, as the weak close by Wall Street stocks overnight weighed on the averages in the region. Lackluster economic reports from the U.S. rekindled recovery concerns and driving traders away from risky bets. The yen, considered a safe-haven, rose to a 7-week high against the euro in the Asian session before pulling back.
Japan's Nikkei 225 average snapped its 2-day rally, ending the session down 183.30 points or 1.96% at 9,179. The average opened lower and languished in negative territory throughout the session.
A majority of stocks declined in the session, with Sumitomo Osaka, NKSJ HD, Nissan Chemical Industries, Nippon Sheet Glass, Mitsubishi Electric, Mitsubishi Material, Kuraray and Dowa Holdings leading the slide. On the other hand, Trend Micro rallied after its U.S. peer McAfee (MFE) agreed to be acquired by Intel. Softbank also saw decent gains.
Australia's All Ordinaries opened modestly lower and pulled back sharply in early trading. Thereafter, the index moved roughly sideways to close down 47.50 points or 1.05% at 4,462. The market witnessed broad based selling, with energy and material stocks leading the slide.
Hong Kong's Hang Seng Index opened moderately lower and moved sideways for the rest of the session to close down 90.64 points or 0.43% at 20,982. Among the index heavyweights HSBC Holdings declined 1.59%, while China Mobile advanced 1.28%. Most other sectors, barring resource stocks, ended notably lower.
Europe
Although the major European markets opened Friday's session higher, they retreated in early trading and are currently trading lower moderately lower. The major averages in the region fell sharply on Thursday, dragged down by the negative jobless claims report from across the Atlantic.
The French CAC 40 Index is currently trading down 1.31% compared to a 0.89% drop by the German DAX Index, while the U.K.'s FTSE 100 Index is down a more modest 0.40%.
Stocks in Focus
Earnings
Dell (DELL) reported that its second quarter non-GAAP earnings rose 10% to 32 cents per share. The company's revenues rose 22% to $15.5 billion. The results were ahead of expectations. The company also reiterated its full year revenue growth guidance of 14%-19% and its non-GAAP operating income growth guidance of 18%-23%, while analysts estimate sales growth of 16.80%.
Hewlett-Packard's (HPQ) third quarter non-GAAP earnings per share rose to $1.08 from 92 cents in the year-ago period. Net revenues rose 11.4% to $30.7 billion. Analysts estimated earnings of $1.08 per share on revenues of $30.43 billion. For the fourth quarter, the company estimates non-GAAP earnings of $1.25-$1.27 per share on revenues of $32.5 billion to $32.7 billion. The consensus estimates call for earnings of $1.26 per share on revenues of $30.43 billion. The company guided full year earnings to $4.49-$4.51 per share and revenues to $125.3 billion to $125.5 billion. The Street estimates earnings of $4.50 per share on revenues of $124.94 billion.
Foot Locker (FL) reported that its second quarter net income came in at 4 cents per share compared to break-even results in the previous year. However, sales fell 0.3% to $1.10 billion. Analysts estimated earnings of 3 cents per share on revenues of $1.13 billion.
Salesforce.com (CRM) said its second quarter non-GAAP earnings per share remained flat at 29 cents per share, while revenues rose 25% to $394 million. Analysts estimates, which typically exclude one-time items, called for earnings of 27 cents per share on revenues of $384.78 million. The company raised its fiscal year 2011 revenue guidance to $1.595 billion to $1.6 billion, while analysts estimate revenues of $1.57 billion. For the fourth quarter, the company expects non-GAAP earnings of 30-31 cents per share on revenues of $408 million to $410 million. The third quarter guidance was above the consensus estimates.
Marvell Technology's (MRVL) second quarter non-GAAP net income climbed to 40 cents per share from 18 cents per share last year, in line with the consensus estimate. Net revenue rose 40% to $896 million, trailing the mean analysts' estimate of $906.80 million. The company also announced that its board has authorized the buyback of up to $500 million shares.
Intuit (INTU) reported a loss of 5 cents per share on a non-GAAP basis for its fourth quarter compared to a loss of 10 cents per share last year, while revenues rose 18% to $537 million. Analysts estimated a loss of 10 cents per share on revenues of $500.69 million. For fiscal year 2011, the company expects revenues of $3.74 billion to $3.84 billion, while analysts estimate revenues of $3.42 billion. Separately, the company also said it has approved a new $2 billion stock repurchase program.
Aeropostale (ARO) said its second quarter earnings rose to 46 cents per share from 38 cents per share last year, in line with the consensus estimate. Sales rose 9% year-over-year to $497.7 million, missing the consensus estimate of $503.07 million. The company also said it expects third quarter net earnings of 61-63 cents per share, including a charge of 4 cents per share. Analyst estimates, which typically exclude one-time items, call for earnings of 72 cents per share.
Gap (GPS) said its second quarter earnings per share rose 3 cents to 36 cents per share and its net sales rose 2% to $3.32 billion. Analysts estimated earnings of 35 cents per share on revenues of $3.31 billion. The company reiterated its 2010 earnings guidance of $1.77-$1.82 per share compared to the consensus estimate of $1.79 per share. Separately, the company announced board approval for a new program to buy back $750 million worth of shares.
Hormel Foods (HRL) reported that its third quarter earnings rose to 63 cents per share from 57 cents per share last year, while revenues rose 10% year-over-year $1.7 billion. Analysts estimated earnings of 60 cents per share on revenues of $1.67 billion. The company also raised its full year earnings guidance to $2.85-$2.91 per share, while analysts estimate earnings of $2.84 per share.
Other Corporate News
Eli Lilly (LLY) could see some activity after a FDA advisory committee voted 8-6 in favor of expanding the pain indications for the company's Cymbalta to a broader pain population that will be further defined by the FDA, if approved.
Rambus (RMBS) is also likely to be in focus after it announced that it has initiated a share repurchase program to buy about $90 million of its common stock through an accelerated repurchase agreement with JP Morgan Securities.
Another stock that could react to stock buyback news is Nordstrom (JWN), which said its board has authorized a $500 million repurchase program that would run through January 28, 2012.
Agrium (AGU) could be in focus after it announced a definitive agreement with Australia's AWB Ltd to buy all shares of AWB for 1.50 Australian dollars per share.
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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.