Disappointment is writ all over Wall Street after Federal Reserve Chairman Ben Bernanke did not sound out any specific plans to dole out more stimuli. Adding to concerns was a rate cut announced by China yesterday, which has accentuated fears over the nature of a few Chinese economic data due to be released on Saturday. Reflecting the reversal in risk sentiment, risky bets are seeing some downside. The markets may also focus on some Fed speeches scheduled for the day and the Commerce Department's trade balance report.
As of 6:30 am ET, the Dow futures are receding 23 points, the S&P 500 futures are moving down 2.50 points and the Nasdaq 100 futures are slipping 5.50 points.
U.S. stocks closed on a lackluster note on Thursday, as Bernanke's testimony did not give any clear direction to any forthcoming stimulus.
On the economic front, Minneapolis Federal Reserve Bank President Narayana Kocherlakota is scheduled to deliver an academic talk at the Mitsui Finance Symposium at the University of Michigan Ross School of Business in Ann Arbor.
The trade gap data for April is due out at 8:30 am ET. Economists estimate that the trade gap narrowed to $49.3 billion from $51.8 billion in the previous month.
The Commerce Department is also due to release its wholesale inventories report at 10 am ET. Economists expect wholesale inventories at the end of April to show a 0.5 percent increase a compared to 0.3 percent growth in March.
In corporate news, Logitech (LOGI) said it expects to record a pre-tax charges of about $35 million related to its previously announced restructuring, with $32 million of it expected to be recorded in the first quarter ending June. The company expects the restructuring, which includes the elimination of 450 jobs or 13 percent of its workforce, to yield a net $80 million reduction in annual operating costs.
Progressive Software (PRGS) issued second quarter guidance below consensus estimates.
Piedmont (PNY) reported second quarter net income of 70 cents per share compared to 66 cents per share in the year-ago period. Operating revenues fell 21 percent to $308.43 million. The company lowered its 2012 earnings guidance toward the low end of its earlier guidance range of $1.58-$1.68 per share.
Altera (ALTR) said it expects second quarter revenues growth to be in line with its previous guidance of 14-18 percent sequential growth. The guidance surrounded the consensus estimate.
Quiksilver (ZQK) reported second quarter results below expectations.
Comtech Telecommunications (CMTL) reported third quarter earnings of 29 cents per share compared to 47 cents per share last year. Net sales fell to $99.8 million from $131.1 million the year-ago period. The result beat expectations. The company tightened its 2012 revenue guidance to $420 million to $425 million and increased its earnings per share guidance to $1.40-$1.48 per share. The earnings guidance was above consensus expectations, while the revenue guidance surrounded the consensus estimates.
The major Asian markets snapped a 3-session rally and declined, disappointed over foiled expectations regarding stimulus. Additionally, the rate cut by China also accentuated concerns about the economic growth of the nation, which has now metamorphosed into the global growth engine. The risk averse sentiment pushed yen higher after its recent weakness.
Japan's Nikkei 225 average opened lower and declined steadily in the morning before seeing some consolidation in the afternoon. The index closed down 180.46 points or 2.09 percent at 8,459, weighed down by the stifling of risk appetite and the yen's strength.
A revised report released by Japan's Cabinet Office showed that Japan's GDP rose at a 1.2 percent sequential pace in the first quarter. This represented an upward revision from the 1 percent growth forecast initially.
Australia's All Ordinaries opened higher, but immediately reversed course, falling sharply in early trading. The index stabilized around the lower level in early afternoon trading and moved sideways thereafter before closing down 45.50 points or 1.09 percent at 4,111.
Hong Kong's Hang Seng Index ended down 175.95 points or 0.94 percent at 18,502, while India's Sensex advanced moderately.
European stocks are also moving to the downside, as global growth concerns have remerged even as the debt crisis plaguing the region remained unresolved. A bleak trade data from Germany did little to improve sentiment.
German statistical office reported that the nation's exports declined 1.7 percent month-on-month in April, marking the first decline since December 2011. Economists expected a mere 0.7 percent drop in shipments. Meanwhile, imports fell a steeper 4.8 percent. Consequently, the trade surplus fell to 14.4 billion euros in April from 17.4 billion euros in March, although more than the 13 billion euros worth of surplus expected by economists.
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