Upbeat GDP Data May Generate Early Buying Interest

(RTTNews) - The major U.S. index futures are pointing to a modestly higher opening on Friday following the release of a report showing stronger than expected economic growth in the third quarter. Traders are also digesting the latest batch of earnings news from several big-name companies.

U.S. stocks went about a lackluster run yet again on Thursday before ending lower. The major averages opened higher but saw volatility in morning trading. After recovering in late morning trading, the Dow Industrials and the S&P 500 Index held mostly above the unchanged line before pulling back into the red going into the close. The Dow ended down 29.65 points or 0.16 percent at 18,170, and the S&P 500 Index closed 6.39 points or 0.30 percent lower at 2,133.

Meanwhile, the Nasdaq Composite spent the better part of the session below the unchanged line before ending down 34.29 points or 0.65 percent at 5,216.

Eighteen of the thirty Dow components ended the session lower, while the remaining twelve stocks advanced. Chevron (CVX), Caterpillar (CAT) and Boeing (BA) were among the worst performers of the session, but DuPont (DD), Verizon (VZ) and IBM (IBM) rose sharply.

Among the sectors, real estate, networking, gold, housing, and steel stocks saw considerable weakness on the day, while notable strength was visible among telecom and trucking stocks.

On the economic front, the Labor Department reported that jobless claims fell to 258,000 in the week ended October 22nd from an upwardly revised reading of 261,000 reading for the previous week. However, the four-week average rose to 253,000 from 252,000. Continuing claims calculated with a week's lag fell by 15,000 to 2.039 million in the week ended October 15th.

Meanwhile, the Commerce Department reported that durable goods orders unexpectedly fell 0.1 percent month-over-month in September. Economists had expected a 0.2 percent increase for the month. However, the previous month's flat reading was upwardly revised to 0.3 percent growth.

Excluding transportation, orders climbed 0.2 percent, ahead of the 0.1 percent increase expected by economists. August's reading was revised to 0.1 percent growth from the 0.4 percent drop estimated earlier. Annually, orders climbed 1.6 percent. Core capital goods orders fell 1.2 percent month-over-month, although shipments of this category were up 0.3 percent, boding well for the third quarter GDP data.

Pending home sales climbed 1.5 percent month-over-month in September, according to a report released by the National Association of Realtors. Economists expected a 1 percent increase for the month. The previous month's drop was downwardly revised to 2.5 percent from 2.4 percent. Geographically, the South and the West saw strong increases.

Commodity, Currency Markets

Crude oil futures for December delivery are falling $0.45 to $49.27 a barrel after climbing $0.54 to $49.72 a barrel on Thursday, snapping a 3-session retreat. Gold futures are currently trading at $1,265 an ounce, up $4.50 from the previous session's close of $1,269.50 an ounce. On Thursday, gold rose $2.90.

On the currency front, the U.S. dollar is trading at 105.21 yen compared to the 105.29 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.0917 compared to yesterday's $1.0897.

Asia

Asian stocks ended mixed once again, with a weaker yen, the listless trading on Wall Street overnight and wariness concerning the U.S. third quarter GDP data among the catalysts.

The Japanese market advanced on the yen weakness. The Nikkei index 225 Index opened higher and moved roughly sideways for the rest of the session before ending up by 109.99 points or 0.63 percent at a 6-month high of 17,446. The gains came as the yen breached the 105 level and solid results from German bank Deutsche Bank as well as increases in U.S. and Japanese government bond yields lifted financials.

The Australian market ended modestly lower after profit warnings from ANZ and insurer AMP. The All Ordinaries Index ended down 7.50 points or 0.14 percent at a more than 1-month low of 5,371, extending losses for the third straight session.

China's Shanghai Composite index dropped 8.08 points or 0.26 percent to 3,104, as losses in the infrastructure sector overshadowed gains among financials in the wake of well-received earnings updates from banks and brokerages. Hong Kong's Hang Seng index closed down 177.54 points or 0.77 percent at 22,955.

In major corporate news from the region, Samsung Electronics climbed 2.6 percent after its shareholders voted to appoint 48-year-old Lee Jae-yong, Chairman Lee Kun-hee's only son, to its board of directors.

On the economic front, Japan reported inflation data showing that the country's core inflation rate hit a three-year low in September. Separate reports showed that the jobless rate fell to 3 percent from 3.1 percent in the previous month, while household spending slumped again in the month.

Europe

European stocks are also going about a lackluster run amid a sell-off in global bonds and reactions to mixed earnings reports.

On the economic front, the European Commission showed that a gauge of Eurozone economic confidence hit a 10-month high in October. The headline index rose more than expected to 106.3 from 104.9 in September.

Separately, French consumer spending unexpectedly dropped 0.2 percent in September after a 0.8 percent increase in August, preliminary data from statistical office INSEE revealed.

French annual consumer price inflation remained stable at 0.4 percent in October, while producer prices edged up 0.1 percent month-over-month after remaining flat in the previous month.

U.S. Economic Reports

A report released by the Commerce Department showed that economic activity increased by more than expected in the third quarter.

The report said real gross domestic product climbed by 2.9 percent in the third quarter after rising by 1.4 percent in the second quarter. Economists had expected 2.5 percent growth.

The Commerce Department said the stronger than expected growth reflected positive contributions from consumer spending, exports, private inventory investment, federal government spending, and non-residential fixed investment.

The University of Michigan is due to release its final U.S. consumer sentiment index for October at 10 am ET. Economists expect the index to come in at 88.5, up from the flash estimate of 87.9 but down from 91.2 in September.

Stocks in Focus

Energy giant Exxon Mobil (XOM) reported better than expected third quarter earnings but on revenues that came in below analyst estimates.

Rival Chevron (CVX) reported third quarter results that exceeded expectations on both the top and bottom lines.

Google parent Alphabet (GOOGL) reported better than expected third quarter adjusted earnings per share and revenues. Aggregate paid clicks rose 33 percent, while cost per click fell 11 percent.

Amazon's (AMZN) third quarter earnings per share trailed estimates, while its sales exceeded estimates. The company's fourth quarter revenue guidance was in line.

Amgen (AMGN) reported forecasting-beating third quarter results and raised its adjusted earnings per share guidance for the full year.

Baidu.com (BIDU) reported downbeat results for its third quarter and its fourth quarter revenue guidance was weak.

LinkedIn (LNKD), which has inked a deal to be acquired by Microsoft (MSFT), reported third quarter adjusted earnings per share and revenues that trailed estimates.