Futures Pointing To Early Weakness On Wall Street
(RTTNews) - The major U.S. index futures are pointing to a lower open on Friday following the lackluster performance seen in the previous session. Traders may look to cash in on the recent strength in the markets, which has lifted the major averages to new record highs. Nonetheless, trading activity may be somewhat subdued as traders look to get a head start on the long Presidents Day weekend.
After trending higher over the past several sessions, stocks turned in a relatively lackluster performance during trading on Thursday. Despite the lack of direction, the Dow managed to inch up to another new record closing high.
The major averages eventually ended the day on opposite sides of the unchanged line. While the Dow crept up 7.91 points or less than a tenth of a percent to 20,619.77, the Nasdaq edged down 4.54 points or 0.1 percent to 5,814.90 and the S&P 500 dipped 2.03 points or 0.1 percent to 2,347.22.
The choppy trading on Wall Street came as traders expressed some uncertainty about the near-term outlook for the markets following the recent run to record highs.
While some traders may look to cash in on the recent gains, others may be reluctant to sell and miss out on any further upside.
Traders were also digesting another batch of U.S. economic data, including a report from the Labor Department showing a modest increase in initial jobless claims in the week ended February 11th.
The report said initial jobless claims edged up to 239,000, an increase of 5,000 from the previous week's unrevised level of 234,000. Economists had expected jobless claims to climb to 245,000.
A separate report from the Commerce Department showed a pullback in housing starts in January, although the report also showed a jump in building permits.
The Commerce Department said housing starts fell by 2.6 percent to an annual rate of 1.246 million in January after jumping by 11.3 percent to a revised 1.279 million in December.
Meanwhile, building permits, an indicator of future housing demand, jumped by 4.6 percent to a rate of 1.285 million in January after rising by 1.3 percent to a revised 1.228 million in December.
The Philadelphia Federal Reserve also released a report showing a substantial acceleration in the pace of growth in regional activity in February.
The Philly Fed said its index for current manufacturing activity in the region soared to 43.3 in February from 23.6 in January, with a positive reading indicating growth.
With the sharp increase during the month, the Philly Fed Index skyrocketed to its highest level since January of 1984.
Many of the major sectors ended the day showing only modest moves, contributing the lackluster close by the broader markets.
Oil service stocks saw considerable weakness, however, with the Philadelphia Oil Service Index slumping by 1.9 percent. The weakness in the sector came despite a modest increase by the price of crude oil.
Significant weakness was also visible among natural gas stocks, which moved lower along with the price of natural gas.
On the other hand, gold stocks moved sharply higher on the day, driving the NYSE Arca Gold Bugs Index up by 2.1 percent. The strength in the sector came amid an increase by the price of gold.
Commodity, Currency Markets
Crude oil futures are slipping $0.26 to $53.10 a barrel after rising $0.25 to $53.36 a barrel on Thursday. Meanwhile, gold futures are currently trading at $1,242.80 an ounce, up $2.60 from the previous session's close of $1,241.60 an ounce. On Thursday, gold climbed $8.50.
On the currency front, the U.S. dollar is trading at 112.72 yen compared to the 113.24 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.0648 compared to yesterday's $1.0674.
Asian stocks fell on Friday after a mixed session on Wall Street overnight. With oil prices caught in a range on concerns over growing U.S. crude production and the yen strengthening, investors opted to stay on the sidelines ahead of the weekend.
The arrest of Samsung's de facto leader Lee Jae-yong for bribery, embezzlement and perjury in connection to a massive corruption scandal also hurt regional sentiment.
China's Shanghai Composite Index dropped 27.54 points or 0.85 percent to 3,202.08 as investors locked in some of the recent gains. Hong Kong's Hang Seng Index fell 73.96 points or 0.31 percent to 24,033.74 on uncertainty over the U.S. fiscal and monetary policy.
Japanese shares fell as the yen gained ground amid the G20 gathering in the German city of Bonn. The Nikkei 225 Index slid 112.91 points or 0.58 percent to 19,234.62, while the broader Topix index closed 0.42 percent lower at 1,544.54.
Exporters fell broadly, with Panasonic, Hitachi, Toyota and Suzuki Motor declining 1-2 percent. Oil explorer Inpex lost 1 percent and property developer Mitsui Fudosan fell as much as 3 percent. Toshiba Corp shares plunged 9.2 percent after rating agency S&P Global warned of another downgrade.
Banks Mitsubishi UFJ Financial, Mizuho Financial and Sumitomo Mitsui Financial ended down between half a percent and 1 percent after U.S. bond yields eased overnight in the wake of dovish comments from influential Fed policy maker William Dudley.
Australian shares ended a choppy session modestly lower as gains among banks were offset by weakness in the mining sector. The benchmark S&P/ASX 200 Index ended down 10.50 points or 0.18 percent at 5,805.80 after notching its highest close since May 5, 2015 on Thursday. The broader All Ordinaries Index closed 12 points or 0.20 percent lower at 5,851.
Lower copper and iron ore prices weighed on the mining sector, with BHP Billiton, Rio Tinto and Fortescue Metals Group losing 1-2 percent. Whitehaven Coal lost 2.4 percent after the company said it would use the extra cashflow from the recent jump in coal prices to speed up its debt payments.
Health insurer Medibank Private tumbled 3.9 percent and airline Virgin Australia Holdings lost 2.6 percent after unveiling their first-half results.
Meanwhile, oil & gas producer Santos rose half a percent as it unveiled a full-year net loss of $1.05 billion after a billion-dollar write-down on its Queensland venture. ANZ advanced 1.9 percent after reporting a 31 percent rise in cash earnings in the three months to December.
European stocks have also moved mostly lower on the day. While the French CAC 40 Index has slumped by 1 percent, the German DAX Index is down by 0.5 percent. However, the U.K.'s FTSE 100 Index has edged up by 0.1 percent.
The day's economic reports disappointed investors, with U.K. retail sales unexpectedly falling in January for the third straight month amid an uptick in inflation, while the euro area current account surplus declined to a seasonally adjusted 31 billion euros in December from 36.4 billion euros in November.
Investors were also digesting U.S. President Donald Trump's remarks on Thursday that he had inherited a mess at home and abroad.
Shares of oil and chemical storage firm Vopak have come under pressure after its 2016 core profit missed estimates. Aegon has also moved lower percent despite reporting better-than-expected underlying earnings for the fourth quarter.
Meanwhile, Allianz shares have climbed after the German insurer announced a share buyback program worth up to 3 billion euros after posting solid fourth-quarter results.
Drugmaker Stada Arzneimittel has also moved higher after saying the open-minded talks with the two potential bidders are continuing.
U.S. Economic Reports
Following the slew of U.S. economic data released over the two previous days, the schedule of releases for Friday is relatively quiet.
At 10 am ET, the Conference Board is due to release its report on leading economic indicators in the month of January. The leading economic index is expected to rise by 0.4 percent.
Stocks in Focus
Food giant Kraft Heinz (KHC) said it would continue to pursue a merger with Unilever (UN) even after the Dutch consumer goods declined a proposal valued at $125 billion.
WebMD (WBMD) reported better than expected fourth quarter earnings and said it will explore potential strategic alternatives, including the sale of part or all of the company.
Shares of TrueCar (TRUE) are moving sharply higher in pre-market trading after the car buying website operator reported a narrower than expected fourth quarter loss and provided upbeat guidance.
Networking company Arista Networks (ANET) is also likely to see early strength after reporting fourth quarter results that exceeded analyst estimates.
Meanwhile, Nu Skin (NUS) may come under pressure after the company reported weaker than expected fourth quarter results and offered disappointing guidance.