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Stocks May Extend Recovery In Early Trading - U.S. Commentary


While trading activity is likely to be subdued, stocks may move to the upside in early trading on Friday. The major index futures are currently pointing to a higher open for the markets, with the Dow futures up by 41 points.

The markets may extend the upward move seen earlier in the holiday-interrupted week, as traders pick up stocks at reduced levels after the sell-off that was seen on the heels of the elections.

Nonetheless, many traders are likely to remain away from their desks following the Thanksgiving Day holiday on Thursday. The abbreviated trading session, which ends at 1 pm ET, is also likely to lead to light volume.

Retail stocks may attract some attention, however, as investors attempt to gauge the strength of the holiday shopping season on reports regarding the Black Friday crowds.

A number of retailers opened their doors even earlier than usual this year in order to increase sales on what is already one of the busiest shopping days of the year.

Amid a light news day, trading could also be impacted by remarks by San Francisco Federal Reserve Bank president John Williams, who told the Wall Street Journal he wants the Fed to keep buying mortgage-backed securities and extend Operation Twist in 2013.

"A decision not to continue buying long-term Treasurys when Twist expires…would be a surprise to markets and that would be counterproductive," Williams told the Journal.

He added, "In my view it would push long-term rates up and cause financial conditions to be a little less supportive of growth."

Among individual stocks, shares of Research in Motion (RIMM) are moving sharply higher in pre-market trading following bullish comments from an analyst at National Bank. RIM is currently up by 12.6 percent.

After initially showing a lack of direction, stock moved modestly higher over the course of the trading day on Wednesday. The markets benefited from a positive reaction to news that Israel and Hamas agreed to a ceasefire in Gaza.

The major averages moved roughly sideways going into the close, hovering in positive territory. The Dow rose 48.38 points or 0.4 percent to 12,836.89, the Nasdaq climbed 9.87 points or 0.3 percent to 2,926.55 and the S&P 500 edged up 3.22 points or 0.2 percent to 1,391.03.

In overseas trading, stock markets across the Asia-Pacific region closed mostly higher on Friday, although the Japanese market was closed for a public holiday. Hong Kong's Hang Seng Index and China's Shanghai Composite Index advanced by 0.8 percent and 0.6 percent, respectively.

The major European markets have also moved to the upside on the day. While the French CAC 40 Index has edged up by 0.2 percent, the U.K.'s FTSE 100 Index and the German DAX Index are both up by 0.3 percent.

In commodities trading, crude oil futures are slipping $0.16 to $87.22 a barrel after advancing $0.63 to $87.38 a barrel on Wednesday. Gold futures, which rose $4.60 to $1,728.20 an ounce on Wednesday, are climbing #3.70 to $1,731.90 an ounce.

On the currency front, the U.S. dollar is trading at 82.26 yen compared to the 82.46 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.2913 compared to yesterday's $1.2886.

by RTTNews Staff Writer

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