INVESTORS BACK OFF RALLY

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NEW YORK (CNNMoney) — U.S. stocks were poised to start trading in the red Friday, as questions and doubts about Europe’s debt-crisis deal start to emerge.

The Dow Jones industrial average (INDU), SP 500 (SPX) and Nasdaq (COMP) futures were all lower ahead of the opening bell Friday morning. Stock futures indicate the possible direction of the markets when they open at 9:30 a.m. ET.

Stocks surged about 3% on Thursday, following news that European leaders reached a deal that may be a step toward resolving the region’s debt crisis.

The previous session’s rally pushed the SP 500 into positive territory for the year, for the first time since Aug. 4. The broad index is now on track for its best monthly performance since October 1974.

The gains also pushed the Dow above the 12,000 mark, for the first time since Aug. 1. The blue-chip index is headed for its best month since January 1987.

Though investors were at first relieved, details about Europe’s deal remain sketchy and doubts are running high.

“We don’t for one moment think the European Sovereign crisis is close to being over, but markets have moved on a bit over the last few weeks, and we’ll likely need new information to really test the deal,” wrote Jim Reid, market strategist at Deutsche Bank, in a note to clients.

Also on Thursday, the U.S. government reported that third-quarter gross domestic product — the broadest measure of a country’s economic activity — increased at an annual rate of 2.5%. The pace of growth was in line with expectations, and was nearly double the 1.3% growth rate in the second quarter.

Companies: Firms including pharmaceutical giant Merck (MRK, Fortune 500) and oil producer Chevron (CVX, Fortune 500) will release their quarterly results before the opening bell on Friday.

Analysts surveyed by Briefing.com expect Merck to post earnings of 91 cents per share, up from 85 cents a year ago. Chevron is projected to report earnings of $3.42, jumping from $1.87 last year.

Whirlpool (WHR, Fortune 500) plans to cut about 5,000 jobs in North America and Europe, the company announced early Friday. Excluding one-time charges, Whirlpool earned $2.35 per share in the third quarter, falling far short of analysts’ forecasts for $2.61 per share.

Economy: The government will release data on personal income and spending for the month of September on Friday. Analysts surveyed by Briefing.com expect income to have risen 0.3% from the previous month, following a 0.1% drop. Spending is expected to have risen 0.6%, off a 0.2% rise in the month prior.

Third quarter data on employment costs is also on tap for Friday. Analysts expect costs to have risen 0.6%, after rising 0.7% in the previous quarter.

World markets: European stocks were mixed in morning trading. Britain’s FTSE 100 (UKX) fell 0.2%, the DAX (DAX) in Germany was flat and France’s CAC 40 (CAC40) slid 0.2%.

Asian markets ended higher. The Shanghai Composite (SHCOMP) gained 1.6%, the Hang Seng (HSI) in Hong Kong climbed 1.7% and Japan’s Nikkei (N225) rose 1.4%.

Currencies and commodities: The dollar fell against the Japanese yen and British pound, but gained strength against the euro.

Oil for December delivery slipped $1.51 to $92.45 a barrel.

Gold futures for December delivery fell $10.30 to $1,737.40 an ounce.

Bonds: The price on the benchmark 10-year U.S. Treasury rose, pushing the yield down to 2.38% from 2.40% late Thursday.  To top of page

Article source: http://rss.cnn.com/~r/rss/money_topstories/~3/j62Nv8mozsQ/index.htm

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