Markets On Track To Rebound From 2-Month Lows

(RTTNews) - The major U.S. index futures are pointing to a higher opening on Friday, the last trading session of the week. Earnings news of the day has been mixed. The recent weakness, which has pushed the market towards 2-month lows, should serve as a catalysts for buying. Traders may also keep a close eye on the G7 meeting of finance ministers and central bank governors in Tokyo to see which the world's developed economies think is the right way to take the global economy forward.

Commodities are mostly higher, although oil is flat-lining. The dollar is mixed. Bargain hunting is supporting the markets across the Atlantic. The domestic markets may also focus on a report on existing home sales due shortly after the markets open and the Fed speeches scheduled for the day.   U.S. stocks ended Thursday's session mostly lower amid a retreat in commodities prices and the release of mostly positive economic data.    The major averages opened lower and fell further in early trading. After moving roughly sideways till the mid-session, the indexes trimmed some of their losses over the course of the afternoon yet ended moderately lower.    The Dow Industrials ended down 91.22 points or 0.52 percent at a more than 2-month low of 17,435, the S&P 500 Index closed 7.59 points or 0.37 percent lower at 2,040, its lowest level since March 28th, and the Nasdaq Composite slid 26.59 points or 0.56 percent before ending at 4,713.    Twenty-three of the thirty Dow components declined, while seven stocks advanced. Boeing (BA), Caterpillar (CAT), Verizon (VZ), IBM (IBM) and Goldman Sachs (GS) were among the worst performers of the session. On the other hand, Wal-Mart (WMT) rose close to 10 percent on its earnings and Cisco (CSCO) also rose notably in reaction to its quarterly results.    Among the sectors, airline, biotechnology and brokerage stocks showed significant moves to the downside, while gold stocks gained ground.    On the economic front, jobless claims fell to 278,000 in the week ended May 14th from an unrevised reading of 294,000 for the previous week. Economists had expected claims to decline to 275,000. The 4-week average rose 7,500 to 275,750. Continuing claims calculated with a week's lag fell to 2.152 million in the week ended May 7th from 2.165 million in the week ended April 30th.    Manufacturing activity in the Philadelphia region continued to contract in May, according to a report from the Philadelphia Federal Reserve. The diffusion index of business activity came in at -1.8 compared to -1.6 in April. The consensus estimate had called for an improvement in the index to 3. The new orders index fell to -1.9 from 0, but the shipments index improved to -0.5 from -10.8. The employment indexes also improved yet remained in negative territory. The six-month outlook index fell to 36.1 from 42.2.    Meanwhile, the Conference Board reported that its leading economic indicators index rose 0.6 percent month-over-month in April, more than the 0.4 percent increase expected by economists. The previous month's growth of 0.2 percent was downwardly revised to show a flat reading. Rate spread, factory hours and building permits all contributed positively to the index, but consumer confidence had an adverse effect. 

Currency, Commodity Markets   Crude oil futures for June delivery are rising $0.59 to $48.75 a barrel after edging down $0.03 to $48.16 a barrel on Thursday. Gold futures are currently trading at $1,256.10 an ounce, up $1.30 from the previous session's close of $1,254.80 an ounce. On Thursday, gold tumbled $19.60.    On the currency front, the U.S. dollar is trading at 109.99 yen compared to the 109.96 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.1204 compared to yesterday's $1.1203. 

Asia   The major Asian markets advanced, ignoring the negative lead from Wall Street overnight.     Japanese stocks rose, as the yen weakened. The Nikkei 225 Index opened lower but trimmed its losses in early trading. After moving back and forth across the unchanged in a narrow range till early afternoon trading, the index moved decisively higher and hovered in positive territory for the rest of the session. The index ended up 89.69 points or 0.54 percent at 16,736.    A majority of stocks saw strength, with most export, financial, real estate and utility stocks moving notably higher. On the other hand, construction and pharmaceutical stocks lost ground.    Australia's All Ordinaries Index traded in positive territory for much of the session before ending up 29.60 points or 0.55 percent at 5,415. The market witnessed broad based strength, with consumer, energy, IT and material stocks leading the gains.    China's Shanghai Composite Index added 18.58 points or 0.66 percent before ending at 2,826, and Hong Kong's Hang Seng Index closed at 19,852, up 157.87 points or 0.80 percent. 

Europe   European stocks opened notably higher following the previous session's steep declines. After moving roughly sideways, the indexes have given back some ground yet remain solidly higher. Firming commodities prices are lending support to resource stocks.    In major corporate news, Richemont reported a steep drop in sales for April and warned of challenging market conditions. However, the company's fiscal year 2016 profits and sales rose year-over-year. Fraport said its 2016 results are expected to meet or exceed expectations.     On the economic front, German producer prices continued to drop in April, figures from the German Federal Statistical Office showed. Producer prices declined 3.1 percent year-over-year in April, matching the decrease seen in March but slightly faster than the 3 percent drop forecast by economists.   Producer prices have been falling since August 2013. The 3.1 percent decrease is the biggest since January 2010, when prices slid 3.5 percent.    A report from the European Central Bank revealed that the euro zone's current account surplus increased to a four-month high in March, thanks to higher exports of goods.   U.S. Economic Reports   Federal Reserve Governor Daniel Tarullo is scheduled to speak about insurance industry regulation in Washington, D.C. at 9 am ET.  

The National Association of Realtors is due to release its existing home sales report for April at 10 am ET. Economists expect existing home sales to come in at a seasonally adjusted annual rate of 5.400 million units compared to a 5.330 million unit rate in March. 

Existing home sales rose 5.1 percent month-over-month to a seasonally adjusted annual rate of 5.33 million units in March, while economists expected a more modest increase to 5.27 million units. The rate for February was revised to 5.07 million units. Annually, sales increased by 1.5 percent. Single-family home sales rose 5.5 percent month-over-month. The median price of an existing home rose 5 percent to $222,700, resulting in an annual gain of 5.7 percent.   Stocks in Focus    Gap (GPS) reported in line first quarter earnings per share, but its net sales fell year-over-year amid a drop in comparable store sales. The company also expressed apprehension concerning achieving the consensus earnings estimate for the full year, citing soft trends in the apparel retail environment.    Autodesk (ADSK) reported a loss for its second quarter that was in line, but its revenues missed estimates. The company's second quarter guidance also trailed expectations. 

Deere (DE) reported above-consensus second quarter results but cut its 2016 profit guidance.

Campbell Soup (CPB) raised its earnings per share growth guidance for full year after reporting a decline in its third quarter adjusted earnings per share. The company's revenues missed estimates.   Mentor Graphics (MENT) reported above-consensus first quarter non-GAAP earnings per share but revenues fell year. The company's full year revenue guidance was positive.    Applied Materials (AMAT) reported better than expected second quarter non-GAAP earnings per share and its revenues rose marginally. The company's second quarter guidance was upbeat.    Brocade (BRCD) issued downbeat guidance for the third quarter after reporting in line second quarter earnings.     Kilroy Realty (KRC) announced a 7.1 percent increase in its annualized dividend.