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Stocks May Regain Ground Following Recent Weakness - U.S. Commentary


After moving sharply lower over the two previous sessions, stocks may regain ground in early trading on Friday. The major index futures are currently pointing to a significantly higher open for the markets, with the Dow futures up by 214 points.

Bargain hunting may contribute to early strength on Wall Street after the major averages tumbled to multi-month closing lows on Thursday.

A positive reaction to earnings news from financial giants JPMorgan Chase (JPM), Citigroup (C), and Wells Fargo (WFC) may also generate buying interest.

The upward momentum on Wall Street also comes on the heels of a rebound by the overseas markets, which moved higher as strong Chinese trade data helped eased concerns over slowing global growth.

Figures from China's customs administration showed Chinese exports logged double-digit annual growth in September despite escalating trade tensions with the U.S.

Additionally, top White House economic adviser Larry Kudlow told reporters a meeting between President Donald Trump and Chinese President Xi Jinping at a multilateral summit in November is "under discussion."

On the U.S. economic front, the Labor Department released a report showing a much bigger than expected increase in U.S. import prices in the month of September.

The Labor Department said import prices climbed by 0.5 percent in September after falling by a revised 0.4 percent in August. Economists had expected import prices to rise by 0.2 percent.

Meanwhile, the report said export prices came in unchanged in September after slipping by a revised 0.2 percent in August. Export prices had also been expected to increase by 0.2 percent.

Shortly after the start of trading, the University of Michigan is scheduled to release its preliminary report on consumer sentiment in the month of October. The consumer sentiment is expected to inch up to 100.4 in October from 100.1 in September.

Stocks saw substantial volatility over the course of the trading session on Thursday before ending the day sharply lower. The major averages finished the day firmly in the red, adding to the steep losses posted on Wednesday.

The major averages closed firmly in negative territory but off their lows of the session. The Dow plunged 545.91 points or 2.1 percent to 25,052.83, the Nasdaq slumped 92.99 points or 1.3 percent to 7,329.06 and the S&P 500 plummeted 57.31 points or 2.1 percent to 2,728.37.

In overseas trading, stock markets across the Asia-Pacific region rebounded on Friday following recent weakness. Japan's Nikkei 225 Index rose by 0.5 percent, while Hong Kong's Hang Seng Index surged up by 2.1 percent.

The major European markets have also moved back to the upside on the day. While the U.K.'s FTSE 100 Index has climbed by 0.7 percent, the German DAX Index and the French CAC 40 Index are both up by 0.8 percent.

In commodities trading, crude oil futures are climbing $0.88 to $71.85 a barrel after plunging $2.20 to $70.97 a barrel on Thursday. Meanwhile, after soaring $34.20 to $1,227.60 an ounce in the previous session, gold futures are falling $4.30 to $1,223.30 an ounce.

On the currency front, the U.S. dollar is trading at 112.27 yen compared to the 112.16 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.1553 compared to yesterday's $1.1593.

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