RTTNews - U.S. stocks are set for a lower opening Friday morning, as weaker sentiment stemming from the ongoing economic uncertainty is expected to weigh down on markets. Conflicting views on the itinerary for a turnaround is keeping traders on the sidelines despite a surprise drop in weekly jobless claims below the 600,000 mark for the first time since January. Volumes are anemic, in line with the typical summer trading pattern.
As of 6.30 am ET, the Dow Futures were down 50 points, the S&P Futures were down 5.30 points, and the Nasdaq 100 futures were down 8.25 points.
Thursday, stocks ended a choppy session in positive territory as a sharp drop in weekly jobless claims below the 600,000 mark for the first time since January was partly offset by larger-than-expected drop in comparable stores sales of chain stores for June. Traders largely shrugged off May wholesale trade data from the Commerce Department, that showed that wholesale inventories fell by less than economists had been expecting. The report also showed a modest increase in wholesale sales. Semiconductor , housing, banking and resource stocks managed to post gains while the laggards included the healthcare stocks and commercial real estate stocks.
The Dow managed to end the session up by 4.76 points or 0.1% at 8,183, the Nasdaq rose by 5.38 points or 0.3% to 1,753 and the S&P 500 finished up by 3.12 points or 0.4% at 883.
The last day of the trading week will be busy from the traders' perspective. The markets will receive the trade balance figures from the Commerce Department at 8:30 a.m. ET along with the export & import price indexes for June, which gives the changes in the prices of non-military goods and services traded between the U.S. and the rest of the world. Economists expect the trade deficit to widen to $30.0 billion in May from $29.2 billion in April.
Shortly after the opening bell on Wall Street, the Reuters/University of Michigan's preliminary reading of consumer sentiment for July is scheduled to be released. Analysts expect the index to edge down to 70.3 from the final reading of 70.8 for June. Treasury Secretary Tim Geithner is set to testify before a joint hearing of House Financial Services and Agriculture Committees regarding derivatives regulation at 10 a.m. ET.
After the markets closed on Thursday, engineering and construction company Shaw Group Inc. (SGR) stated that its third quarter profit plunged to $7.9 million or $0.09 per share, much lower than $52.0 million or $0.62 per share reported in the same period last year, hurt by foreign currency translation losses on Japanese Yen-denominated bonds. The company also lowered its earnings forecast for fiscal 2009.
In its interim update released after the markets closed, Chevron Corp. (CVX), said that its U.S. refining margins for the second quarter fell sharply and that it expects its downstream results for the quarter to be significantly lower than the previous quarter.
According to media reports, beleaguered automaker General Motors Corp. (GMGMQ.PK) is set to emerge from a 38-day bankruptcy Friday as a new entity majority-owned by the U.S. Government. The U.S. government will hold a 61% stake in the new company and the remaining shares will be held by a United Auto Workers union healthcare trust, the governments of Canada and Ontario, and GM's former unsecured bondholders.
Light sweet crude oil for August delivery is currently trading below the $60 a barrel mark, losing $0.82 at $59.59, after ending the previous session with a gain of 27 cents at $60.41 a barrel. The dollar is presently gaining against the pound and the euro, while continuing to weaken against the Japanese Yen.
The European markets are trading in negative territory dragged down by Chevron's disappointing interim update. refining margins and outlook for the second quarter. The CAC-40 Index is currently down 0.70%, the DAX Index in Germany is down 0.71% and FTSE Index in the U.K is losing 0.74%.
Earlier, in the economic news, the Federal Statistical Office in Germany revealed that wholesale price index fell 8.8% year-on-year in June after falling 8.9% in May. On a monthly basis, wholesale prices rose 0.9% in June following increases of 0.1% each in May and April. In France, the central bank revealed that the country;s current account deficit narrowed to EUR 2.2 billion in May from a revised deficit of EUR 3.5 billion in April. The U.K.'s Office for National Statistics revealed that the country's output prices unexpectedly fell 0.2% month-on-month in June after rising 0.4% in May, beating expectations for a 0.3% increase. On an annual basis, prices fell 1.2%, the lowest annual rate of producer output prices since December 2001.
Most of the markets across the Asia-Pacific region ended in the negative territory with marginal losses as traders preferred to stay on the sidelines ahead of the weekend. .
A report from the Bank of Japan revealed that corporate goods prices in the country dropped by the steepest year-over-year pace on record in June, mainly due to a dip in petroleum and coal prices and the prices of scrap and waste products. The corporate goods price index dipped 6.6% year-on-year in June, after falling a revised 5.5% in the previous month. , revised from a 5.4% drop. Economists expected prices to fall 6.4%. Month-on-month, the corporate goods prices were down 0.3% in June, slower than a revised 0.5% decline in the preceding month, but faster than economists' estimates of a 0.1% drop.
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