RTTNews - U.S. stocks are set for a higher opening Friday morning on increasing confidence that the worst for the economy is over On Thursday, positive economic data on housing sales and weekly jobless claims along with better-than-expected earnings helped the major averages extend their winning streak. That said, traders could react to disappointing results from Microsoft and Amazon.
As of 6.30 am ET, the Dow Futures were up 22.00 points, the S&P Futures were up 1.90 points, and the Nasdaq 100 futures were up 2.75 points.
Encouraging economic numbers on home sales and weekly jobless claims helped stocks stage a substantial rally in the previous session, as hopes of recovery in the later part of the year gained a further boost. Data revealed by the National Association of Realtors showed that existing home sales increased for the third consecutive month in June. Existing home sales rose by 3.6% to an annual rate of 4.89 million units in June from a downwardly revised rate of 4.72 million in May. A separate report from the Labor Department showed that jobless claims rose slightly less than economists had expected.
First-time claims in the week ended July 18th rose to 554,000 from the previous week's revised figure of 524,000. Economists had expected jobless claims to increase to 557,000 from the 522,000 originally reported for the previous week.
Better-than-expected results from 3M (MMM), Ford (F), Wyeth (WYE), McDonald's (MCD), AT&T (T) and Qualcomm (QCOM) as well as a rise in commodity prices also supported the upside.
Almost all the sectors participated in a broad-based rally, with housing, real estate, oil service and airline stocks leading the gains.
The Dow closed up by 188.03 points or 2.1% at 9,069, the Nasdaq advanced by 47.22 points or 2.5% to 1.974 and the S&P 500 rose by 22.22 points or 2.3% to 976.
On economic front, traders will focus on the Reuters/University of Michigan's final report on the consumer sentiment index for July scheduled to be released at 9:55 AM ET. Economists forecast a decline in the index to 65 from June's 70.8, but slightly higher than the mid-month reading of 64.6.
Prominent companies to report earnings today include Black & Decker Corp. (BDK), Fortune Brands (FO), Ingersoll-Rand Co. (IR) and Schlumberger (SLB).
Trader will also be digesting the results of companies including bellwether Microsoft (MSFT) and Amazon (AMZN).
Microsoft Corp. (MSFT) said that its fourth quarter profit fell 29% from last year, hurt mainly by weakness in the global PC and server markets. The company's quarterly revenue fell 17% from a year ago and missed analysts' estimate by a wide margin.
Networking equipment maker Juniper Networks, Inc. (JNPR) said that its second quarter profit dropped 88% from last year, hurt by lower revenue and gross margins as well as a hefty income tax charge.
Memory chip maker Rambus Inc. (RMBS) said that its second quarter loss narrowed from last year, even as revenue dropped 24.4% reflecting expiration of patent license agreements.
Chipmaker PMC-Sierra, Inc. (PMCS) reported a plunge in second-quarter profit, hurt partly by a hefty income tax provision as well as a 12% drop in revenues.
Online retailer Amazon.com Inc. (AMZN), said that its second quarter profit declined 10% from last year, hurt by a settlement with Toysrus.com. In addition, the company provided sales outlook for the third quarter, in-line with the analysts' expectations.
Credit card service provider American Express Co. (AXP), granted a bank-holding status in November last year, said that its second quarter net income fell 48% from last year, hurt by increased write-offs and slower cardmember spending. Earnings for the quarter were also impacted by the repurchase of preferred shares from the U.S. Treasury Department.
Chip maker Broadcom Corp. (BRCM), reported a plunge in second quarter profit on substantially lower income from operations and lower revenues. Revenue for the quarter dropped, hurt by weak performance from all its segments.
Online movie rental company Netflix, Inc. (NFLX) reported a surge in second-quarter profit, as revenues increased 21% from last year, driven by the double-digit growth in subscriber base.
Light sweet crude oil for September delivery is currently trading at $67.33, up $0.17 from its previous close in New York at $67.16 on Thursday.
The Dollar is weakening against the Euro and the Pound, while gaining strength against the Japanese currency Yen.
The European markets are trading in positive territory extending the gains on expectation that the worst for the global economy is over and the economy can start recovering from the later part of the year. The CAC-40 Index in France is gaining 0.44%, the DAX Index in Germany is rising 0.47% and the FTSE Index in the UK is gaining 0.57%.
On economic front, the Office for National Statistics reported that the gross domestic product declined 0.8% quarter-on-quarter in the second quarter, after falling 2.4% in the first three months of the year. Economists were looking for a 0.3% contraction.
In a separate report, the Munich-based Ifo Institute for Economic Research said its business climate indicator for Germany rose to 87.3 in July from 85.9 in June. The index rose above the expected level of 86.5.
The Asian markets ended the last day of the week on a positive note with gains on expectation that the worst for the global economy in general and the U.S. Economy in particular is over and the economy can start recovery in the later part of the year.
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