US SUMMARY: GM Aids Dow, But Nasdaq Slips
DJIA 11342.89 gain 64.12 up 0.6%
NASDAQ 2362.55 loss 8.33 dn 0.4%
S&P 500 1311.46 gain 1.53 up 0.1%
Dow Future 11393.00 gain 7.00 up 0.1%
NASDAQ Future 1745.75 gain 4.50 up 0.3%
S&P Future 1318.00 gain 1.00 up 0.1%
10-Yr US Treasury: 5.04% up 0.01
(Futures values as of 0450 GMT)
Stocks closed mixed Thursday after earnings reports from General Motors Corp. and Merck Co. Inc. pushed the Dow Jones industrial average up to a six-year high while the Nasdaq composite sagged along with eBay Inc. Prices of Treasurys fell slightly.
STOCKS: Dow component General Motors' stock gained 10 percent after the automaker reported record revenues along with its sixth straight quarterly loss. Drugmaker Merck & Co., also a Dow component, reported an 11 percent jump in first-quarter profit.
Google Inc.'s first-quarter earnings, reported after the close of regular trading, sent the stock sharply higher in after-hours trading and pointed to greater investor enthusiasm Friday.
In economic news, new applications for unemployment benefits dropped by 10,000 to 303,000, according to the Labor Department. The figure was the best showing since the beginning of April, suggesting the labor market is maintaining decent momentum, but reviving the fear of wage inflation.
Oil futures retreated from record highs. A barrel of light crude hit a record high of $72.49 in trading on the New York Mercantile Exchange before falling to $71.95, down 22 cents from Wednesday's record closing price.
"The message this week is pretty simple: People are looking for an excuse to buy stocks rather than sell stocks," said Ryan Larson, equity trader at Voyageur Asset Management, a subsidiary of RBC Dain Rauscher. "A year ago, $70 oil would have been the death of us; today, the market is able to digest it and look for positives."
Economic data continued to point to moderating growth. The Conference Board, a private research group, said its Index of Leading Economic Indicators dropped to 138.4 in March from 138.5 the previous month. The declines in the index, a closely watched gauge of future economic activity, followed four consecutive months of rising readings.
BONDS: U.S. Treasury prices drifted modestly lower Thursday as negative market sentiment provided the path of least resistance.
The Federal Reserve Bank of Philadelphia said its April manufacturing index rose to 13.2 from 12.3 the month before. But that relative good news was blunted by rising price pressures faced by factory operators in that region. The bank's prices paid index jumped to 29 from 17.2 in March.
ASIAN SUMMARY: Japan Shares Rise As Commodities Cool
USD-Yen 117.56 gain 0.04 up 0.03%
AUD-USD 0.7391 gain 0.0014 up 0.2%
Nikkei 225 17443.88 gain 126.30 up 0.7%
Hang Seng 16899.57 loss 44.77 dn 0.3%
Taiwan Index 7141.47 gain 38.73 up 0.6%
S.Korea Kospi 1456.55 gain 22.40 up 1.6%
JGB Yield 1.9600% up 0.0600
(All values as of 0450 GMT)
STOCKS: Japanese stocks climbed Friday, with optimism for economic fundamentals and upcoming earnings helping to shrug off an early dip. Auto industry shares rallied, while trading companies took a breather after setting recent highs. Traders look for the market to tread water from here, until more earnings reports come out next week.
Australia's share market remained weak with resource stocks under pressure from declines in red-hot commodities, but traders viewed this as a pause before more gains.
BONDS: Prices of Japanese government debt sank, mainly because investors switched into stocks.
FOREX: U.S. President George W. Bush said Thursday that he'd like to see the Chinese yuan strengthen further. Pressure on China to allow the yuan to appreciate had grown ahead of Chinese President Hu Jintao's visit to Washington Thursday and the meeting of the International Monetary Fund and Group of Seven leading industrial nations this weekend.
COMMODITIES: Oil prices opened at a record $73.50 a barrel Friday before pulling back slightly as traders took profit. June oil is now down 71 cents at $72.98. Dealers said profit-taking was overdue and prices should resume their climb next week amid so much political turmoil surrounding such hot spots as Venezuela, Nigeria and Iran.
Spot gold, now at $613/oz after shedding a whopping $33 overnight, is expected to trade in a wide $605-624 range in coming sessions, says Darren Heathcote, head of trading at Rothschild Australia.
Base metals showed signs of a recovery Friday, as many investors still believed in bargain buying on dips.
EUROPEAN OUTLOOK: Stocks To Open In Positive Territory
Euro-USD 1.2310 loss 0.0004 dn 0.05%
Stlg-USD 1.7797 gain 0.0009 up 0.05%
USD-Franc 1.2786 gain 0.0003 up 0.02%
(All values as of 0450 GMT)
European shares are set for slight gains at the open, with government debt and the euro under some pressure.
STOCKS: European markets are likely to start tentatively higher, but profit-taking on commodities markets may curtail any buying interest in mining and energy shares. Auto industry issues will be spotlighted after gains in the sector on Wall Street and in Japan.
U.K. spreadbettor IG Index is calling the FTSE up 4 points at 6085, the DAX up 15 at 6078 and the CAC up 9 at 5215.
European stock markets finished higher on Thursday, boosted by strong quarterly earnings from Finnish mobile phone giant Nokia and a series of upbeat reports from top French companies like Vivendi Universal, though a sharp decline in metals prices sent the U.K. market lower.
BONDS: European government debt issues may open lower in price with markets expecting more rate hikes from the ECB, maybe one more from the Fed and none from the Bank of England.
The markets currently price in a 10% probability of an ECB 25-basis-point hike in May, a 100% chance of a hike in June and an 85% probability of a follow-up move in September, strategists at Barclays Capital noted.
With the Federal Reserve linking further rate hikes to the "implications of incoming information," investors are likely to "snap up every piece of data" said Kornelius Purps, fixed-income strategist at HVB.
European government bond prices were up but off their highest levels late Thursday as the market awaited the Philly Fed figures.
FOREX: The euro is seeing some good buying interest around $1.2300 but sell orders loom at around $1.2330, setting up a narrow trading range for the session Friday.
CALENDAR: Friday, April 21: France Buying; Italy Sales
Friday, April 21, 2006
GMT Expected Previous
0645 FRA Mar Household consumption expenditure in -0.8%MM +1.8%MM
mfg goods +4.2%YY +4.5%YY
0800 ITA Mar Foreign Trade, non-EU
0900 ITA Feb Retail Sales +0.1%MM
2110 US Pres Bush participates in roundtable on
US competitiveness in San Jose, Calif.
N/A GER Apr Fin Min's monthly report, Berlin
N/A US No major economic indicators scheduled