Stocks May Open Higher Amid Light Post-Christmas Trading - U.S. Commentary

(RTTNews) - After ending Wednesday's trading roughly flat following a late-day pullback, stocks are likely to move back to the upside in early trading on Friday. The major index futures are currently pointing to a higher open for the markets, with the Dow futures up by 35 points.

The markets may benefit from the recent upward momentum on Wall Street, which has lifted the Dow to new record highs above 18,000.

Stocks have trended higher since last Wednesday, when the Federal Reserve said it would be patient in beginning to normalize the stance of monetary policy.

Traders seem to have interpreted the remark as an indication that the Fed will be cautious in its decision to begin raising interest rates.

Continued signs of strength in the economy have also contributed to the recent positive sentiment, as the U.S. continues to outperform many of the other major developed nations.

Paul Dales, Senior U.S. Economist at Capital Economics, said upbeat personal spending data released on Tuesday means consumption growth in the fourth quarter could be as strong as 4.0 percent.

"It is clear that real consumption is being boosted by the effects of lower gasoline prices and the acceleration in job growth," Dales said.

He added, "The upshot is that it is now possible that GDP growth in the fourth quarter will be even stronger than our current 3.0 percent forecast."

Nonetheless, trading activity is likely to be relatively subdued, as many traders are likely to remain away from their desks following the Christmas Day holiday on Thursday.

After seeing modest strength for much of the session, stocks gave back ground going into the close of trading on Wednesday. Despite the late-day pullback, the Dow managed to end the session at a new record closing high.

The Dow inched up 6.04 points or less than a tenth of a percent to 18,030.21, while the Nasdaq rose 8.05 points or 0.2 percent to 4,773.47. On the other hand, the S&P 500 slipped into the red in the final minutes of trading, edging down 0.29 points or less than a tenth of a percent to 2,081.88.

In overseas trading, many of the major markets across the Asia-Pacific region were closed on the day, although China's Shanghai Composite Index surged up by 2.8 percent. Japan's Nikkei 225 Index also inched up by 0.1 percent.

Meanwhile, following the Christmas Day holiday on Thursday, the major European markets remained closed on Friday for Boxing Day.

In commodities trading, crude oil futures are climbing $0.61 to $56.45 a barrel after ending Wednesday's trading down $1.28 at $55.84 a barrel. Gold futures are jumping $21.20 to $1,194.70 an ounce. In the previous session, gold fell $4.40 to $1,173.30 an ounce.

On the currency front, the U.S dollar is currently trading at 120.37 yen compared to the 120.10 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.2174 versus Wednesday's $1.2225.