The major U.S. index futures are pointing to a flat opening on Friday, with sentiment indecisive as the markets trade at overbought levels. Economic reports released earlier in the day failed to give a clear direction to the markets. Consumer prices rose more than expected, while there has been a moderation in activity of the manufacturing sector of the New York region. The markets will now turn to the industrial production report and the results of a consumer sentiment survey for direction.
U.S. stocks extended their gains on Thursday after U.S. jobless claims unexpectedly fell in the recent reporting week. The major averages opened higher and moved roughly sideways until late afternoon trading. The indexes advanced steadily thereafter and closed moderately higher.
The Dow Industrials ended up 83.86 points or 0.58 percent at 14,539 and the S&P 500 Index closed 8.71 points or 0.56 percent higher at 1,563, while the Nasdaq Composite Index closed at 3,259, up 13.81 points or 0.43 percent.
Twenty-three of the thirty Dow components closed higher, with Hewlett-Packard (HPQ), IBM (IBM) and JP Morgan Chase (JPM), McDonald's (MCD) and Chevron (CVX) leading the gains.
Energy, gold, housing and computer hardware stocks were among the best performers of the session.
On the economic front, jobless claims fell by 10,000 to 332,000 in the week ended March 9th, marking the second lowest level in five years. The four-week average declined to 346,750 and continuing claims calculated with a week's lag fell by 89,000 to 3.024 million in the week ended March 2nd.
Meanwhile, a separate Labor Department report showed that producer prices rose 0.7 percent month-over-month in February. Annual producer price inflation rose 0.3 percentage points to 1.7 percent. Core producer prices rose 0.2 percent month-over-month, while annually core producer prices were up 1.7 percent, representing the smallest increase in 2 years.
Currency, Commodity Markets
Crude oil futures are rising $0.60 to $93.63 a barrel after moving up $0.51 to $93.03 a barrel on Thursday. Gold futures are currently climbing $2.20 to $1,592.20 an ounce. In the previous session, gold added $2.30 to $1,590.70 an ounce.
Among currencies, the U.S. dollar is trading at 95.96 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 $1.3002.
Asia
The major Asian markets closed on a mixed note, with the Japanese, Australian, Indonesian, Chinese and New Zealand markets closing higher, while the rest of the major markets declined.
With the yen remaining at depressed levels after the upper house of the Japanese parliament endorsed the candidacy of pro-easing reformist Haruhiko Kuroda as the Governor of the Bank of Japan, the Nikkei 225 average closed notably higher. The average opened higher and moved sideways before advancing in the mid-session. Once again, the average consolidated in the afternoon before closing up 179.76 points or 1.45 percent at 12,561.
Most export stocks advanced, while some financial, auto and resource stocks came under pressure. Tokyo Dome rallied 15.07 percent and Sony climbed 10.98 percent. Toyobo ended up over 9 percent.
Australia's All Ordinaries moved steadily higher throughout the session, closing up 85.50 points or 1.70 percent at 5,129. The market witnessed broad based strength, with healthcare, consumer staple, energy, financial, material and utility stocks all notching solid gains.
Hong Kong's Hang Seng Index closed at 22,533, down 86.07 points or 0.38 percent. Meanwhile, China's Shanghai Composite closed 8.12 points or 0.36 percent higher at 2,278.
Europe
European stocks opened lower and have seen further downside since then, as traders take profits from recent gains.
In corporate news, Rentokil reported a narrowing in its pre-tax loss for its fourth quarter on higher revenues. The company also raised its dividend for 2012 to 2.1 pence per share from.
Swedish retailer H&M reported comparable store sales that fell 3 percent in February, while sales, including VAT, were up 2 percent for its first quarter.
U.S. Economic Reports
Consumer prices in the U.S. rose by more than expected in the month of February, according to a report released by the Labor Department on Friday, 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.
While the Federal Reserve Bank of New York released a report on Friday showing that conditions for New York manufacturers continued to improve in March, 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.
The Treasury is due to release its report on the flows of financial instruments into and out of the U.S. at 9 am ET.
Shortly after, at 9:15 am ET, the Federal Reserve will release its industrial production report for February. The consensus estimate call for a 0.5 percent increase in industrial output, while capacity utilization is expected to have improved to 79.4 percent.
In January, industrial output edged down 0.1 percent month-over-month, with manufacturing output declining by 0.4 percent and mining output slipping by 1 percent, while utility output rose 3.5 percent. Capacity utilization fell 0.2 points to 79.1 percent.
Reuters and the University of Michigan are scheduled to release the results of their preliminary consumer sentiment survey for March at 9:55 am ET. Economists expect the headline consumer sentiment index based on the survey to edge down to 77.5 from 77.6 in February.
Stocks in Focus
Aeropostale (ARO) reported fourth quarter adjusted earnings of 24 cents per share on net sales of $797.7 million, down 1 percent year-over-year. For the first quarter, the company expects a loss of 15-20 cents per share. The results were ahead of estimates, while the guidance was weak.
Zumiez (ZUMZ) reported fourth quarter net income of 74 cents per share compared to 60 cents per share last year on sales that rose 22.1 percent to $183.9 million. For the first quarter, the company expects earnings of 4-7 cents per share, including 4 cents per share in charges, on revenues of $141 million to $144 million. The results were better than expected, while the guidance trailed expectations.
Blyth (BTH) reported fourth quarter adjusted earnings of $1.42 per share, lower than $1.80 per share last year. Net sales fell to $331.02 million from $345.55 million in the year-ago quarter. For 2013, the company expects earnings of $1.70-$1.85 per share on an overall single digit sales decline.
Sprint (S) and Verizon (VZ) announced separately that they would offer Samsung's recently introduced Galaxy S4. Sprint said it would begin offering Samsung's newest smartphone in the second quarter.
Aetna (AET) announced that it has teamed up with Starr International Insurance (Asia) Ltd. to offer medical insurance and healthcare solutions in Hong Kong.
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