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U.S. Stocks May See Initial Strength On Upbeat Earnings News


After ending the previous session modestly higher, stocks may see some further 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 74 points.

Early buying interest may be generated in reaction to upbeat earnings news from Microsoft (MSFT), with the software giant jumping by 2.8 percent in pre-market trading.

The advance by Microsoft comes after the company reported fiscal fourth quarter results that exceeded analyst estimates on both the top and bottom lines.

The markets may also continue to benefit from optimism about a near-term interest rate cut following comments from New York Federal Reserve President John Williams on Thursday

Williams said it "pays to act quickly to lower rates at the first sign of economic distress," arguing it is "better to take preventative measures than to wait for disaster to unfold."

However, a New York Fed spokesman later claimed Williams' remarks were based on years of research and not specifically about potential policy actions at the upcoming Fed meeting.

The University of Michigan is scheduled to release its preliminary report on consumer sentiment in the month of July shortly after the start of trading. The consumer sentiment index is expected to inch up to 98.5 in July after dropping to 98.2 in June.

Stocks saw considerable volatility over the course of the trading session on Thursday, with the major averages showing wild swings back and forth across the unchanged line before eventually ending the day in positive territory.

Following the pullback seen over the two previous sessions, the Dow inched up 3.12 points or less than a tenth of a percent to 27,222.97. The Nasdaq also rose 22.04 points or 0.3 percent to 8,207.24, while the S&P 500 climbed 10.69 points or 0.4 percent to 2,995.11.

In overseas trading, stock markets across the Asia-Pacific region moved significantly higher during trading on Friday. Japan's Nikkei 225 Index soared by 2 percent, while Hong Kong's Hang Seng Index jump by 1.1 percent.

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

In commodities trading, crude oil futures are rising $0.39 to $55.69 a barrel after tumbling $1.48 to $55.30 a barrel on Thursday. Meanwhile, after climbing $4.80 to $1,428.10 an ounce in the previous session, gold futures are up $8.80 at $1,436.90 an ounce.

On the currency front, the U.S. dollar is trading at 107.76 yen versus the 107.30 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.1221 compared to yesterday's $1.1277.

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