The major U.S. index futures are pointing to a lower opening on Friday. The markets' quirky way of reaction is likely to continue, as despite a resurgence in personal income, triggered by stimulus measures and a pick up in consumer spending, the mood seems to be cautious. Commodity prices are holding their ground, while the dollar is showing some weakness against the yen and the euro. Earnings news relays skepticism among companies over near term profit outlook.
Against this backdrop, the markets may focus on the results of the consumer sentiment survey of Reuters/University of Michigan. Volume could turn out to be light ahead of the weekend and also in apprehensions over the upcoming week's labor market report.
Although stocks began Thursday's session on a weak note, they recovered in early trading and moved steadily higher till early afternoon trading. Thereafter, the major averages moved sideways before closing with gains in excess of 2% each.
The Dow Industrials ended up 172.54 points or 2.08% at 8,472 and the Nasdaq Composite gained 37.20 points or 2.08% to close at 1,830. The S&P 500 Index closed at 920, representing a gain of 19.32 points or 2.14%.
Twenty-nine of the thirty Dow components ended the session higher, with Alcoa (AA) (up 5%), American Express (AXP) (up 6.59%), Merck (MRK) (up 4.40%), Pfizer (PFE) (up 4.14%), Caterpillar (CAT) (up 3.26%) and Home Depot (HD) (up 3.92%) leading the advances. Bank of America (BAC) ended unchanged.
The NYSE Arca Securities Broker/Dealer Index and the KBW Bank rose 3.17% and 1.91%, respectively. The Dow Jones Transportation Average rallied 4.38% and the NYSE Arca Airline Index climbed 6.47%. The S&P Retail Index and the Philadelphia Housing Sector Index advanced 3.76% and 4.33%, respectively. While the Philadelphia Oil Service Index rallied 3.57%, the NYSE Arca Oil Index was up a more modest 1.76%. The NYSE Arca Gold Bugs Index ended up about 5% compared to a 3% gain by the Dow Jones U.S. Basic Materials Index. The NYSE Arca Biotechnology Index gained 2.73%.
Among the technology indexes, the Philadelphia Semiconductor Index and the NYSE Arca Networking Index moved up about 2% each and the NYSE Arca Internet Index rose 2.51%. The NYSE Arca Computer Hardware Index and the NYSE Arca Software Index gained over 1% each.
Currency, Commodity Markets
Crude oil futures are gaining $0.11 to $70.34 a barrel after advancing $1.56 to $70.23 a barrel on Thursday. The resumption in the rally in crude oil prices has been supported by geopolitical tensions surrounding the unrest in Iran following the presidential elections there and the civil unrest in Nigeria.
However, Commerzbank is of the view that the above factors will have a limited impact on prices due to the availability of ample spare capacity and the possibility of the strategic release of oil stocks. The firm expects oil prices to finish the year at $70 per barrel.
Gold futures are rising $3.10 to $942.60 an ounce. In the previous session, gold added $8.50 to close at $948 an ounce.
Among currencies, the U.S. dollar is trading at 95.29 yen compared to the 95.95 yen it fetched at the close of New York trading on Thursday. At the same time, the greenback is valued at $1.4080 versus the euro.
Asia
The major Asian markets closed higher on Friday, with the exception of the Indonesian Jakarta Composite Index. India's Sensex advanced the most in the region, rising close to 3%.
Japan's Nikkei 225 average opened higher on the positive U.S. lead, but it came under pressure after a report showed that consumer price inflation in Japan declined sharply in May. However, a commodity rally helped the index recover immediately thereafter and the index advanced solidly to close up 81.31 points or 0.83% at 9,877.
Tire makers led the gains after Bridgestone stated that it expects to report a narrower loss for the first half of the year. The stock gained 8.5%. Yokohoma Rubber advanced 7.57% and Sumitomo Rubber Industries gained 8%.
Nippon Electric, the third largest producer of glass for flat panel televisions, gained more than 6% after doubling its operating profit forecast for the latest quarter, on increasing demand for its products. Among others in the sector, Asahi Glass advanced 2.6%.
Hong Kong's Hang Seng Index opened higher and moved sideways before legging up further in the afternoon. The index ended up 325.23 points or 1.78% at 18,600. Thirty-eight of the forty-two index components ended higher, with property stocks once again leading the advance. China Mercantile Holding, China Unicom, China Shenhua and Cosco Pacific were among the other notable gainers.
Rising global markets, budget expectations and hopes of improvement in monsoon rains by the first or second week of July helped the Indian market bounce-back sharply on Friday after a considerable amount of profit taking in 8 of the 11 previous trading sessions. Sharp gains in market heavyweights Reliance Industries, Larsen & Toubro and ICICI Bank helped the market end near the day's high. The BSE Sensex opened higher at 14,374 and saw some sideways movement before rising sharply to finish at 14,765, up 419 points or 2.92% from the previous close.
Europe
The major European averages are receding on Friday after yesterday's slump, with commodity and financial stocks lending support. The French CAC 40 Index and the German DAX Index are moving down 0.89% and 0.28%, respectively, while the U.K.'s FTSE 100 Index is receding about 0.10%.
On the economic front, the French Institute for Statistics and Economic Studies confirmed its preliminary GDP estimate of a 1.2% sequential decline for the first quarterAccording to the final report, households' consumption expenditure rose 0.2%, while government spending was flat. Total gross fixed capital formation in the first quarter was down 2.4%. Exports dropped 6.4%, exceeding the 5.3% drop in imports.
A separate report released by the INSEE showed that consumer confidence stood at -37 in June, up from -40 in May. Economists had expected a reading of -39 for June. A year earlier, the indicator was at -47.
The German import price index declined 10.4% year-over-year in May compared to the 8.6% fall in the previous month, according to a report released by the German Federal Statistical Office. This was the biggest price decline since February 1987. Economists were looking for a decline of 10.3%. A year ago, import prices were up 6.9%.
U.S. Economic Reports
A report released by the Bureau of Economic Analysis showed that personal income rose by 1.4% in May compared to the previous month. The increase came after an upwardly revised 0.7% month-over-month increase in April. Economists had expected a more modest 0.3% increase for the month. Personal spending rose 0.3%, in-line with estimates, following an upwardly revised unchanged reading in April.
Spending on durable goods rose 0.8% in May after falling 1.3% in April, while spending on non-durable goods rose 0.5%. Spending on services was unchanged in May after rising 0.4% in the previous month. The core price consumption expenditure index rose at a 1.8% year-over-year rate, slower than the 1.8% rate in May.
The Reuters/University of Michigan's final report on the consumer sentiment index for June is scheduled to be released at 10 AM ET on Friday. The index is expected to be unrevised from the previous reading at 69.0, up from a reading of 68.7 in May.
Stocks in Focus
Robbins & Myers (RBN) may come under selling pressure after it reported that its third quarter earnings fell to 31 cents per share from 61 cents per share last year, as sales declined to $143.4 million from $200.9 million in the year-ago period. Analysts expected earnings of 25 cents per share on revenues of $135.2 million. The company narrowed its full year earnings guidance to $1.41-$1.51 per share from its previous estimate of $1.35-$1.65 per share. The consensus estimate calls for earnings of $1.46 per share for the year.
Finish Line (FINL) is also likely to move to the downside after it reported a first quarter loss of 1 cent per share compared to a profit of 2 cents per share last year. Sales fell 7% to $267.2 million. The consensus estimates had called for earnings of 1 cent per share on revenues of $273.15 million.
On the other hand, Tibco Software (TIBX) may trade higher after it said its second quarter earnings climbed to 6 cents per share from 2 cents per share last year. On an adjusted basis, the company reported earnings of 11 cents per share. Revenues declined 5% to $142.7 million. The Street had estimated earnings of 9 cents per share on revenues of $139.4 million.
Micron Technology (MU) is expected to see weakness after it reported a loss of 36 cents per share for its third quarter, wider than the loss of 30 cents per share last year. Revenues were down 26% at $1.1 billion compared to $1.5 billion in the year-ago period. The consensus estimates called for a loss of 43 cents per share on revenues of $1.18 billion.
Palm (PALM) could see strength after its adjusted fourth quarter loss of 40 cents per share came in narrower than the consensus estimate for a loss of 62 cents per share. Revenues fell to $86.8 million, although they were ahead of the consensus estimate of $80.6 million.
Brightpoint (CELL) is likely to be in focus after it said it is filing a shelf registration statement with the SEC covering the resale of up to 30 million shares of the company's stock by NC Telecom Holding.
PotashCorp. (POT) may see weakness after it reduced its second quarter earnings guidance to 70 cents per share from its earlier estimate of $1.10-$1.50 per share due to lower than forecast potash sales volumes due to deferral of purchases by customers around the world and lower realized prices for phosphate fertilizers. Analysts estimate earnings of 93 cents per share for the quarter.
Honeywell (HON) could be in focus after it announced a definitive agreement to acquire Germany-based RMG Group for $400 million. The company noted that RMG Group would be integrated into Honeywell Process Solutions.
Torchmark (TMK) is likely to react to its announcement that it has priced an offering of $300 million in aggregate principal amount of 9.25% senior notes that will mature in 2019. The company said it intends to use the net proceeds for the repayment of the $99.45 million in aggregate amount of the company's 8.25% senior debentures that mature on August 15th, 2009 and for general corporate purposes.
Foot Locker (FL) and J.C. Penney (JCP) are likely to be in focus after Foot Locker said its board has elected Ken Hicks as it President and CEO, effective August 17th, 2009. Hicks will replace Matthew Serra, who has been the company's CEO since March 2001. Hicks has been serving as chief merchandising officer at J.C. Penney.
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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.