U.S. Stocks May Lack Direction Ahead Of Holiday Weekend

(RTTNews) - Following the sharp pullback seen in the previous session, stocks may show a lack of direction in early trading on Friday. The major index futures are currently pointing to a roughly flat open for the markets, with the S&P 500 futures up by just 0.1 percent.

Trading activity is likely to be somewhat subdued on the day, as some traders look to get a head start on the holiday weekend.

Nonetheless, trading may be impacted by reaction to a closely watched reading on inflation included in the Commerce Department's report on U.S. personal income and spending in November.

The reading on inflation, which is said to be preferred by the Federal Reserve, showed the annual rate of consumer price growth slowed to 5.5 percent in November from an upwardly revised 6.1 percent in October.

Economists had expected the annual rate of consumer price growth to slow to 5.3 percent from the 6.0 percent originally reported for the previous month.

Excluding food and energy prices, core consumer price growth slowed to 4.7 percent in November from 5.0 percent in October, in line with economist estimates.

The report also showed personal income rose by 0.4 percent in November after climbing by 0.7 percent in October. Economists had expected personal income to increase by 0.2 percent.

Meanwhile, personal spending inched up by 0.1 percent in November following a 0.9 percent advance in October. Spending was expected to tick up by 0.2 percent.

A separate Commerce Department report showed U.S. durable goods orders tumbled by much more than expected in the month of November.

The report said durable goods orders plunged by 2.1 percent in November after climbing by a downwardly revised 0.7 percent in October.

Economists had expected durable goods orders to decrease by 0.6 percent compared to the 1.1 percent jump that had been reported for the previous month.

Excluding a steep drop in orders for transportation equipment, durable goods orders edged up by 0.2 percent in November after inching up by 0.1 percent in October. Ex-transportation orders were expected to be unchanged.

Shortly after the start of trading, the Commerce Department is scheduled to release its report on new home sales in the month of November.

Economists expect new home sales to tumble by 5.1 percent to an annual rate of 600,000 in November after spiking by 7.5 percent to an annual rate of 632,000 in October.

The University of Michigan is also due to release its revised reading on consumer sentiment in the month of December.

The consumer sentiment index for December is expected to be unrevised from the preliminary reading of 59.1, which was up from 56.8 in November.

Stocks moved sharply lower during trading on Thursday, largely offsetting the substantial rebound seen over the two preceding sessions. With the steep drop on the day, the tech-heavy Nasdaq slumped to its lowest closing level in well over a month.

The major averages climbed well off their worst levels late in the session but remained firmly negative. The Nasdaq plunged 233.25 points or 2.2 percent to 10,476.12, the S&P 500 dove 56.05 points or 1.5 percent to 3,822.39 and the Dow tumbled 348.99 points or 1.1 percent to 33,027.49.

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Friday. Japan's Nikkei 225 Index slumped by 1.9 percent, while China's Shanghai Composite Index fell by 0.3 percent.

Meanwhile, European stocks are turning in a lackluster performance on the day, with the U.K. markets closed early ahead of the holiday weekend. While the U.K.'s FTSE 100 Index inched up by 0.1 percent, the German DAX Index and the French CAC 40 Index are little changed.

In commodities trading, crude oil futures are surging $1.89 to $79.38 a barrel after sliding $0.80 to $77.49 a barrel on Thursday. Meanwhile, after plunging $30.10 to $1,795.30 an ounce in the previous session, gold futures are climbing $8.30 to $1,803.60 an ounce.

On the currency front, the U.S. dollar is trading at 132.68 yen versus the 132.35 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.0622 compared to yesterday's $1.0596.