U.S. Stocks May Move Back To The Upside In Early Trading

After trending lower over the past several sessions, 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 190 points.

A positive reaction to the latest earnings news may contribute to initial strength on Wall Street, as some traders look to pick up stocks at relatively reduced levels.

Shares of Citigroup (C) are moving sharply higher in pre-market trading after the financial giant reported second quarter earnings that exceeded analyst estimates.

Health insurer UnitedHealth (UNH) is also likely to see initial strength after reporting better than expected second quarter results and raising its full-year guidance.

On the other hand, shares of Wells Fargo (WFC) may move to the downside after the mortgage banking giant reported second quarter earnings that missed expectations.

The future have fluctuated following the release of some key U.S. economic data, including a report from the Commerce Department showing retail sales jumped by more than expected in the month of June.

The Commerce Department said retail sales shot up by 1.0 percent in June after edging down by a revised 0.1 percent in May.

Economists had expected retail sales to increase by 0.8 percent compared to the 0.3 percent dip originally reported for the previous month.

Excluding sales by motor vehicle and parts dealers, retail sales still surged by 1.0 percent following a 0.6 percent increase in May. Ex-auto sales were expected to climb by 0.6 percent.

A separate report released by the Federal Reserve Bank of New York on Friday unexpectedly showed growth in regional manufacturing activity in the month of July.

The Labor Department also released a report showing U.S. import prices crept up by much less than expected in the month of June, with a continued surge in prices for fuel imports partly offset by a decrease in prices for non-fuel imports.

While the better than expected data may help ease concerns about a potential recession, it may also add to worries about the Federal Reserve’s willingness to aggressively raise interest rates.

Just before the start of trading, the Federal Reserve is scheduled to release its report on industrial production in the month of June. Industrial production is expected to inch up by 0.1 percent in June after ticking up by 0.2 percent in May.

The University of Michigan is also due to release its preliminary report on consumer sentiment in the month of July shortly after the start of trading. The consumer sentiment index expected to edge down to 49.9 in July from 50.0 in June.

The Commerce Department is also scheduled to release its report on business inventories in the month of May. Business inventories are expected to jump by 1.2 percent.

After moving sharply lower early in the session, stocks regained ground over the course of the trading day on Thursday but still ended the day mostly lower. The major averages climbed well off their worst levels of the day, with the Nasdaq closing just above the unchanged line.

The tech-heavy Nasdaq plunged as much as 2.1 percent in early trading but ended the day up 3.60 points or less than a tenth of a percent at 11,251.19. Meanwhile, the Dow fell 142.62 points or 0.5 percent to 30,630.17 and the S&P 500 dipped 11.40 points or 0.3 percent to 3,790.38.

In overseas trading, stock markets across the Asia-Pacific region turned in another mixed performance during trading on Friday. Japan’s Nikkei 225 Index rose by 0.5 percent, while China’s Shanghai Composite Index slumped by 1.6 percent.

Meanwhile, the major European markets have all moved to the upside on the day. While the German DAX Index has jumped by 1.3 percent, the U.K.’s FTSE 100 Index is up by 0.9 percent and the French CAC 40 Index is up by 0.6 percent.

In commodities trading, crude oil futures are surging $1.78 to $97.56 a barrel after falling $0.52 to $95.78 a barrel on Thursday. Meanwhile, after tumbling $29.70 to $1,705.80 an ounce in the previous session, gold futures are slipping $3.60 to $1,702.20 an ounce.

On the currency front, the U.S. dollar is trading at 138.74 yen versus the 138.96 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.0063 compared to yesterday’s $1.0018.

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