Risk Appetite Improves On Greece, Earnings

(RTTNews) - The major U.S. index futures are pointing to higher opening on Friday, with sentiment reflecting a turnaround from yesterday's lackluster showing. With monetary policy stance offering solace to the markets, the overall mood during the week was upbeat. Crude oil futures are trading flat. Earnings news has largely been encouraging. The simultaneous expiry of stock and index futures and options could generate some volatility. The mood across the Atlantic has also been positive, with markets relishing the commitment from Greece to adhere to reform plans to diffuse a crisis.

U.S. stocks showed divergence on Thursday, as profit taking following the Fed-induced rally generated some weakness in the markets. The major averages opened lower, with the Dow Industrials and the S&P 500 Index declining till the mid-session. After paring some of the losses, the averages moved sideways before closing moderately lower.

The Dow Industrials ended down 117.16 points or 0.65 percent at 17,959 and the S&P 500 Index closed 10.23 points or 0.49 percent lower at 2,089.

Meanwhile, the Nasdaq Composite recovered in early trading and remained mostly above the unchanged line before ending up 9.55 points or 0.19 percent.

Twenty-four of the thirty Dow components closed lower and one stock ended unchanged, while the remaining five stocks advanced. Chevron (CVX), Exxon Mobil (XOM), Disney (DIS) and Caterpillar (CAT) were among the worst decliners of the session, while Merck (MRK) rose notably.

Among the sectors, resource, banking and utility stocks declined notably, while biotechnology stocks gained ground.

On the economic front, the Labor Department reported that jobless claims inched up to 291,000 in the week ended May 14th from 290,000 in the previous week. The four-week average rose to 305,000 from 303,000. Continuing claims calculated with a week's lag fell by 11,000 to 2.417 million in the week ended May 7th.

The results of the Philadelphia Federal Reserve's manufacturing survey showed that growth in the sector slowed in March. The diffusion index of business activity eased to 5 in March from 5.2 in February. The new orders index slipped to 3.9 from 5.4, the shipments index declined to -7.8 from 8.1 and the order backlogs index slipped to -13.8 from 7.3. The employment index edged down 0.4 points to 3.5 and the average workweek index moved down 5.4 points to -11.4. Meanwhile, the 6-month outlook index rose by 2.3 points, although it remained at the second lowest reading since 2013.

The fourth quarter current account balance data released by the Commerce Department showed a wider than expected deficit of $113.5 billion.

The Conference Board reported that its leading economic indicators index rose 0.2 percent month-over-month in February. The yield spread positively contributed to the index followed by stock market prices, credit and consumer expectations. The coincident index also rose 0.2 percent, while the lagging index was up 0.3 percent.

Currency, Commodity Markets

Crude oil futures for April delivery are edging up $0.01 to $43.97 a barrel after sliding $0.70 to $43.96 a barrel on Thursday. The more actively traded May futures are currently down $0.20 at $45.33 an ounce. Gold futures, which rose $1 7.70 to $1,169 an ounce in the previous session, are currently climbing $2.40 to $1,171.40 an ounce. Among currencies, the U.S. dollar is trading at 120.97 yen compared to the 120.78 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.0722 compared to yesterday's $1.0660.

Asia

The major Asian markets ended on a mixed note, with the Japanese, Australian, Chinese, New Zealand, Singaporean and Taiwanese markets advancing, while the Hong Kong, Indian, Indonesian, Malaysian and South Korean markets retreated.

Notwithstanding the yen's firmness, Japanese stocks ended higher on a late-day recovery. The Nikkei 225 average moved about in a nervous manner before recovering and advancing in late trading. The index ended up 83.66 points or 0.43 percent at 19,560.

Yahoo Japan, Toshiba, J Front Retailing, Fujikura and Marui Group were among the best performers of the session.

After turning in a lackluster performance in early trading, Australia's All Ordinaries advanced and closed at the highest level for the day. At the close of trading, the index was up 23.80 points or 0.40 percent at 5,936.

Most sectors advanced, led by IT, consumer, energy, financial and real estate stocks, while telecom stocks came under selling pressure.

China's Shanghai Composite rallied for the seventh straight session before closing 35.05 points or 0.98 percent higher at a 7-year high of 3,617. Meanwhile, Hong Kong's Hang Seng Index ended at 24,375, down 93.65 points or 0.38 percent.

The minutes from the Bank of Japan's February 17 and 18 Monetary Policy Board meeting showed that members believe that the country's economic recovery is continuing at a moderate pace. The members added that the quantitative easing in place is having the desired effects, although they cautioned that the rate of inflation has slowed due to falling energy prices.

The bank also noted that many of the overseas economies also are seeing a lackluster recovery. At the meeting, the central bank kept its monetary policy unchanged, as expected, but lowered its inflation assessment after data showed that the country had exited recession.

Europe

European stocks opened higher but gave back some of their gains in early trading. The averages began moving higher in late morning trading. With very few catalysts to drive trading, the markets in the region are going about a consolidation move.

In other developments, Greek Prime Minister Alexis Tsipras agreed to submit a list of reforms within days, agreeing to the demands of EU leaders. EU leaders sought more concrete steps on reforms and efforts to overcome the standstill on the aid program.

In a statement, the leaders said within the framework of the Eurogroup agreement of February 20, 2015, the Greek authorities will have the ownership of the reforms and will present a full list of specific reforms in the coming days.

Figures released by the German Federal Statistical Office showed that producer prices in Germany dropped more than expected in February. The producer price index fell 2.1 percent year-over-year in February, exceeding economists' expectations for a 2.0 percent drop.

A report released by the U.K. Office for National Statistics showed that public sector net borrowing excluding public sector banks declined by 3.5 billion pounds to 6.9 billion pounds in February. It was forecast to fall to 8.4 billion pounds.

U.S. Economic Reports

Atlanta Federal Reserve Bank President Dennis Lockhart is due to speak on the economy and monetary policy in Athens, Georgia at 10:20 am ET.

Chicago Federal Reserve Bank President Charles Evans will also take part in a panel discussing risk management near the zero lower bound in Washington at 11:30 am ET.

Stocks in Focus

Nike (NKE) reported better than expected third quarter earnings, while its revenues were shy of estimates. The company also noted that worldwide futures orders scheduled for delivery from March through July were up 2 percent year-over-year. Excluding the impact of currency translation, orders were up 11 percent from a year ago.

Darden Restaurants (DRI) reported better than expected third quarter results and also raised its outlook for 2015.

KB Home's (KBH) first quarter results were better than expected.

Tiffany (TIF) reported in line fourth quarter earnings and revenues that trailed estimates.

Ctrip (CTRP) reported better than expected fourth quarter results and issued above consensus revenue growth guidance for the first quarter.

AK Steel (AKS) said it expects to report a loss of 23-28 cents per share for its first quarter, while analysts expect a profit of 1 cent per share. The company attributed the predicament to lower carbon steel spot market shipments and prices amid a jump in unfairly traded imports.

An FDA panel recommended in favor of an asthma treatment co-developed by GlaxoSmithKline (GSK) and Theravance (THRX) to be used for adults but not for adolescents.

Evotec and Sanofi (SNY) announced a strategic alliance that results in a minimum guaranteed commitment from the latter to the former of 250 million euros, including more than 40 million euros in an upfront cash payment.