The major U.S. index futures are pointing to a higher opening on Friday, with sentiment improving following the release of the preliminary second quarter GDP report, which showed a smaller than expected downward revision to growth. Given the uncertainty surrounding the economic recovery, the consumer sentiment report to be released shortly after the markets open and a speech by Federal Reserve Chairman Ben Bernanke due later in the day could also help in determining market direction.
Selling returned to Wall Street on Thursday after the markets saw a temporary, though unconvincing, reprieve in the previous session. The major averages opened higher and stayed mostly above the unchanged line in the morning, encouraged by a bigger than expected decline in jobless claims from elevated levels. However, the averages dipped below the unchanged line in early afternoon trading and moved steadily lower for the rest of the session.
The Dow Industrials ended down 74.25 points or 0.74% at 9,986 and the S&P 500 Index declined 8.11 points or 0.77% to 1,047, while the Nasdaq Composite Index closed 22.85 points or 1.07% lower at 2,119.
Twenty-eight of the thirty Dow components closed lower, with Cisco (CSCO), IBM (IBM), Intel (INTC), JP Morgan (JPM) and Bank of America (BAC) declining sharply in the session. However, Boeing (BA) rose close to a percentage point.
Among the sector indexes, the NYSE Arca Biotechnology Index fell 1.48, the NYSE Arca Securities Broker/Dealer Index receded 1.88%, the Philadelphia Semiconductor Index slipped 1.95%, the NYSE Arca Disk Drive Index dropped 2.49% and the Philadelphia Housing Sector moved down 1.53%. However, the NYSE Arca Gold Bugs Index gained 1.55%.
Currency, Commodity Markets
Crude oil futures are edging down $0.17 to $73.19 an ounce after gaining $0.84 to $73.36 a barrel on Thursday. Gold futures are rising $0.90 to $1,238.60 an ounce. In the previous session, the precious metal slipped $3.60 to $1,237.70 an ounce.
On the currency front, the U.S. dollar is trading at 84.685 yen compared to the 84.446 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.2713 compared to yesterday's $1.2716.
Asia
The major Asian markets ended Friday's session mostly higher after seeing weakness early in the session.
Japan's Nikkei 225 average opened lower and languished in negative territory until the afternoon. Buying picked up in the afternoon, and the index climbed into positive territory in late trading. The index climbed 84.58 points or 0.95% to end at 8,991.
A majority of stocks advanced in the session, although defensive utility, pharma and telecom and financial stocks bucked the uptrend. Hino Motors, Isuzu Motors, J Front Retailing, Kawasaki Heavy Industries, Meidensha, Nissan Motor, Oki Electric Industries, Okuma, Pioneer, Sapporo Holdings and Suzuki Motors were among the biggest gainers.
Auto stocks gained ground following positive production figures announced by automakers for July. The yen's retreat helped export-dependent stocks. On the other hand, Fast Retailing, Mizuho Trust & Banking, Nippon Express and Resona Holdings declined sharply.In economic news, the Ministry of Internal Affairs and Communications said Japan's consumer prices fell 1.1% year-over-year in July, the 17th straight month of decline. At the same time, a separate report released by the ministry showed that the country's unemployment rate edged down to 5.2% in July from 5.3% in June, better than expectations for no change. Another report showed that household spending fell by 0.4% month-on-month in July following a 2.9% increase in June.After languishing in the red in the morning, Australia's All Ordinaries recovered in the afternoon and saw some consolidation in late trading. The index closed up 14.70 points or 0.33% at 4,404. The buying interest was broad based, although moderate.Meanwhile, Hong Kong's Hang Seng traded mostly below the unchanged line before closing down 14.71 points or 0.07% at 20,597. Index heavyweight HSBC Holdings, retailers, resource and property stocks declined sharply, offsetting the optimism found among mainland financial stocks.
Europe
The major European markets are mostly higher on Friday, extending the gains in the previous session. Traders adopted a cautious stance ahead of a key U.S. consumer sentiment report and speech by the Fed Chairman.
The French CAC 40 Index and the German DAX Index are rising 0.53% and 0.01%, respectively, while the U.K.'s FTSE 100 Index is moving up 0.11%.
In economic news, the U.K. Office for National Statistics showed that the U.K. economy grew at an upwardly revised 1.2% rate in the second quarter compared to the 1.1% growth estimated initially, with the revision reflecting an upward revision to construction output growth. The year-over-year growth was also upwardly revised to 1.6%.
The German Federal Statistical Office reported today that Germany's import price index rose 9.9% year-over-year in July compared to a 9.1% increase in June. Economists had estimated a 9.7% increase. However, on a monthly basis, import prices slid 0.2%, less severe than the 0.4% drop expected by economists. Export prices also increased, rising 4.1% year-over-year. In June, the increase was a more modest 3.9%.
U.S. Economic Reports
Economic activity in the second quarter expanded by far less than previously estimated, according to a report released by the Commerce Department, although the downward revision to the pace of gross domestic product growth was not quite as severe as economists had expected.
The Commerce Department said that GDP growth in the second quarter was downwardly revised to 1.6% from the advance estimate of 2.4%. Economists had been expecting second quarter GDP growth to be revised down to 1.4%. The Reuters/University of Michigan's final report on the consumer sentiment index for August is scheduled to be released at 9:55 AM ET. The consumer sentiment index is expected to be upwardly revised to 70.
Federal Reserve Chairman Ben Bernanke is due to speak in Jackson Hole at Wyoming, at 10 AM ET.
Stocks in Focus
Earnings
International Rectifier (IRF) reported that its fourth quarter net income fell to 41 cents per share from 56 cents per share last year. Revenues rose to $263.8 million from $241.9 million last year. Analysts estimated earnings of 26 cents per share on revenues of $258.66 million. Analysts' estimates typically exclude one-time items. For the first quarter, the company estimates revenues of $275 million to $280 million, while analysts estimate revenues of $266.17 million.
Novell (NOVL) said its third quarter non-GAAP earnings fell to 6 cents per share from 7 cents per share last year. Net revenues fell to $199 million from the year-ago's $216 million. The consensus estimates had called for earnings of 7 cents per share on revenues of $200.17 million.
J. Crew (JCG) said its second quarter net income rose to 53 cents per share from 29 cents per share last year. Revenues rose 14% to $407.5 million. The results exceeded expectations. The company reduced its 2010 earnings guidance to $2.25-$2.35 per share from $2.35-$2.45 per share. For the third quarter, the company estimates earnings of 55-60 cents per share. Analysts estimate earnings of $2.46 per share for the year and 71 cents per share for the third quarter.
Other Corporate News
Hewlett-Packard (HPQ) and Dell (DELL) could see some activity in connection with the bidding war they are waging for 3PAR (PAR). HP announced a revised bid for 3PAR on Thursday, exceeding Dell's revised offer of $24.30 per share. In retaliation, earlier today, Dell launched a counter-bid, equaling HP's offer.
Hutchinson Technology (HTCH) could be in focus after it announced the promotion of corporate controller David Radloff to the post of CFO following the resignation of Steve Polacek from the position. Polacek is leaving to accept a position at another company.
Boeing Co. (BA) could react to its announcement that it has postponed the delivery of the first 787, citing a delay in engine availability from Rolls Royce. The Dreamliner is now expected to be delivered by the middle of the first quarter of fiscal 2011. The company's earlier scheduled placed the delivery date at the end of 2010, although the company cautioned last month that the delivery date could be postponed to a few weeks into 2011.
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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.