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Stocks May Take A Breather Following Recent Upward Trend - U.S. Commentary


After trending higher in recent sessions, stocks may take a break from the recent upward move in early trading on Friday. The major index futures are currently pointing to a roughly flat open for the markets, with the Dow futures unchanged.

Uncertainty about the near-term outlook for the markets may contribute to choppy trading on Wall Street, with traders waiting to see if the markets can extend their recent rally.

While a number of analysts have suggested that the markets should stage a correction before seeing much further upside, traders have seemed reluctant to sell stocks.

On the economic front, the Labor Department recently released a report showing that consumer prices rose by more than expected in the month of February, with the monthly price growth largely due to a sharp jump in energy prices.

The Labor Department said its consumer price index rose by 0.7 percent in February after coming in essentially unchanged in each of the two previous months. Economists had been expecting consumer prices to increase by about 0.5 percent.

Meanwhile, core consumer prices, which exclude food and energy costs, edged up by 0.2 percent in February following a 0.3 percent increase in January. The increase in core prices matched estimates.

A separate report from the New York Federal Reserve showed that conditions for New York manufacturers continued to improve in March, although the pace of improvement unexpectedly showed a modest slowdown compared to the previous month.

The New York Fed said its general business conditions index edged down to 9.2 in March from 10.0 in February, with a positive reading indicating an increase in regional manufacturing activity. Economists had expected the index to come in unchanged.

Shortly before the start of trading, the Federal Reserve is scheduled to release a separate report on industrial production in the month of February.

Reuters and the University of Michigan are also due to release their preliminary report on consumer sentiment in the month of March not long after the start of trading.

With upbeat employment generating continued buying interest, stocks moved mostly higher over the course of the trading day on Thursday. The gains extended a recent upward move by the markets, with the Dow closing higher for the tenth consecutive session.

The major averages saw further upside going into the close, ending the session at their best levels of the day. The Dow rose 83.86 points or 0.6 percent to 14,539.14, the Nasdaq climbed 13.81 points or 0.4 percent to 3,258.93 and the S&P 500 advanced 8.71 points or 0.6 percent to 1,563.23.

In overseas trading, stock markets across the Asia-Pacific region turned in another mixed performance during trading on Friday. While Japan's Nikkei 225 Index surged up by 1.5 percent, Hong Kong's Hang Seng Index ended the day down by 0.4 percent.

Meanwhile, the major European markets have all moved to the downside on the day. The German DAX Index has edged down by 0.1 percent, while the U.K.'s FTSE 100 Index and the French CAC 40 Index are down by 0.5 percent and 0.6 percent, respectively.

In commodities trading, crude oil futures are rising $0.56 to $93.59 a barrel after moving up $0.51 to $93.03 a barrel on Thursday. Gold futures are climbing $2.60 to $1,593.30 an ounce. In the previous session, gold rose $2.30 to $1,590.70 an ounce.

On the currency front, the U.S. dollar is trading at 96.04 yen compared to the 96.11 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.3096 compared to yesterday's $1.3044.

by RTTNews Staff Writer

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