Traders Edgy As Data, Eurogroup Verdict On Greece Awaited

(RTTNews) - The major U.S. index futures are pointing to a lower opening on Friday, with sentiment reflecting caution, as traders await two important pieces of domestic economic data on industrial production and consumer sentiment and the Eurogroup's verdict on Greece's bailout. After the Greek Parliament approved the terms of the bailout agreement, the Eurogroup is set to meet to approve the third bailout for the debt strapped nation. Commodities are firmer as the dollar has given back some ground. Weighed down by softer than expected GDP data from the region, European stocks are currently lower.

U.S. stocks ended a lackluster session on Thursday on a mixed note, as receding yuan worries were countered by concerns about a Fed rate hike in the wake of strong domestic data. The major averages opened slightly higher but immediately dipped below the unchanged line and languished mostly below the unchanged line till the mid-session. Subsequently, the averages recovered and advanced till late afternoon trading and then showing a consolidation move. In late trading, the averages pulled back, giving back their gains and closing mixed.

The Dow Industrials ended up 5.74 points or 0.03 percent at 17,408, while the S&P 500 Index dipped 2.66 points or 0.13 percent before closing at 2,083 and the Nasdaq Composite ended at 5,034, down 10.83 points or 0.21 percent.

Notwithstanding the Dow's advance, the breadth was in favor of the decliners, with twenty of the thirty Dow components closing lower, while the remaining 10 stocks advanced.

Caterpillar (CAT), Chevron (CVX) and Intel (INTC) fell notably, while Merck (MRK), McDonald's (MCD), Home Depot (HD), Cisco Systems (CSCO) and Boeing (BA) gained ground.

Among the sectors, energy and gold stocks tumbled and semiconductor and computer hardware stocks also came under pressure.

On the economic front, the Commerce Department reported that retail sales rose 0.6 percent month-over-month in July. Excluding autos, retail sales were up 0.4 percent, in line with estimates. Auto sales swelled 1.4 percent and gas station sales were up 0.4 percent. Other strong performers were non-store retailers, sporting goods and furniture. On the other hand, general merchandise and electronics sales declined. Excluding autos, gasoline and building materials, core retail sales were up 0.3 percent.

The Labor Department reported that jobless claims rose to 274,000 in the week ended August 8th from a downwardly revised 269,000 in the previous week. The four-week moving average eased to 266,250 from 268,000. Continuing claims calculated with a week's lag climbed by 15,000 to 2.273 million in the week ended August 1st.

Another Labor Department report showed that export prices fell by 0.2 percent month-over-month in July. The consensus estimate had called for a 0.3 percent month-over-month drop in export prices. Non-agricultural export prices fell 0.4 percent, offsetting a 0.8 percent increase in agricultural export prices.

Meanwhile, import prices fell 0.9 percent compared to an unchanged reading in June. Economists expected a steeper 1 percent drop. Fuel imports fell 5.7 percent, reflecting the pullback in oil prices, while non-fuel import prices were down a more modest 0.3 percent.

Business inventories rose 0.8 percent month-over-month in June, according to a separate report released by the Commerce Department. Economists expected a more modest 0.3 percent increase. Business sales increased 0.2 percent compared to the previous month. The business inventories to sales ratio rose to 1.37 from 1.30 in the year-ago period.

Currency, Commodity Markets

Crude oil futures are rising $0.12 to $42.35 a barrel after sliding $1.07 to a 6-year low of $42.23 barrel on Thursday. An ounce of gold is currently trading at $1,118.20, up $2.60 from the previous session's close of $1,115.60. On Thursday, gold fell $8.

On the currency front, the U.S. dollar is trading at 124.12 yen compared to the 124.43 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.1171 compared to yesterday's $1.1150.

Asia

The major Asian markets ended mixed, as traders reacted to the lackluster lead from Wall Street overnight and receding concerns about the yuan devaluation. The Malaysian market fell sharply, as the nation's currency went into a tailspin, falling to a 17-year low, amid domestic and overseas concerns. However, the Indian market recorded solid gains.

The Japanese market retreated, as the yen firmed up. The Nikkei 225 Index languished below the unchanged line throughout the session before ending down 76.10 points or 0.37 percent at 20,520.

Export, food, retail, chemical, pharma, glass and resource stocks all came under selling pressure. On the other hand, real estate stocks gained ground.

Australia's All Ordinaries Index, which nervously clung onto the unchanged line till the mid-session, retreated sharply thereafter. The index ended down 29 points or 0.54 percent at 5,360.

Most sectors retreated, with energy stocks among the worst hit. Material and IT stocks also came under intense selling pressure. Meanwhile, consumer discretionary, real estate and utility stocks bucked the downtrend.

Hong Kong's Hang Seng Index ended at 23,991, down 27.77 points or 0.12 percent, while China's Shanghai Composite Index closed at 3,965, up 10.78 points or 0.27 percent.

Europe

After a nervous start in reaction to below-par GDP data from the region, European stocks rallied sharply in early trading as news seeped that the Greek Parliament has approved a draft agreement the nation struck with its creditors over the terms of the third bailout deal. Since then, the averages have trimmed their gains and are currently lower.

After protracted negotiations, the Greek bailout deal was approved by the parliament with 222 votes in favor. However, about 31 MPs from the ruling Syriza party dissented, giving rise to speculation that Prime Minister Alexis Tsipras may have to seek a confidence vote next week. Later today, the Eurogroup finance ministers will discuss whether to grant the nation the bailout.

On the economic front, preliminary GDP report released by the eurozone showed that the euro area's second quarter GDP rose 0.3 percent sequentially compared to the 0.4 percent growth expected by economists. The annual growth at 1.2 percent was also a touch softer than expected.

Meanwhile, the German Federal Statistical Office reported that German GDP expanded 0.4 percent sequentially compared to the consensus estimate of 0.5 percent growth. Weighed down by a steep drop in investment, the French economy stagnated.

Final inflation data released by Eurostat showed that annual inflation for the euro area remained at 0.2 percent in July, the same as in June and in line with the flash estimate. The harmonized index of consumer prices was down 0.6 percent month-over-month in July.

U.S. Economic Reports

The Labor Department is scheduled to release its report on producer prices for final demand at 8:30 am ET. Economists expect a 0.1 percent month-over-month increase in both producer prices for final demand as well as the core reading.

Producer prices for final demand rose a more than expected 0.4 percent month-over-month in June. Annually, producer prices for final demand were down 0.7 percent. Core producer prices for final demand were up 0.3 percent month-over-month, pushing the annual rate of growth up to 0.8 percent. Economists expected a monthly core inflation rate of 0.1 percent.

The Federal Reserve is due to release its industrial production report for July at 9:15 am ET. The consensus estimate calls for a 0.4 percent month-over-month increase in industrial output, while capacity utilization may have eased 0.3 percentage points to 78.1 percent.

Industrial production rose 0.3 percent month-over-month in June, ahead of the 0.2 percent increase expected by economists. Capacity utilization was also higher than expected at 78.4 percent. Manufacturing output was unchanged, but mining output climbed 1 percent. Utilities output also jumped 1.5 percent. Excluding a 3.7 percent drop in motor vehicle output, manufacturing output was up 0.3 percent.

The University of Michigan is scheduled to release the results of its preliminary U.S. consumer sentiment index for August at 10 am ET. Economists expect the consumer sentiment index to edge up to 93.5 in August from 93.1 in July.

Stocks in Focus

Applied Materials (AMAT) reported in line adjusted earnings for the third quarter but its sales missed estimates. The company's fourth quarter guidance was weak.

Nordstrom (JWN) reported second quarter adjusted earnings and revenues that beat estimates. The company raised its 2015 earnings and revenue guidance.

J.C. Penney (JCP) reported narrower than expected loss and above-consensus revenues for its second quarter.