The major U.S. index futures
are pointing to a higher opening on Friday, with sentiment suggesting an
upturn after yesterday’s sharp retreat. Final estimates released by the
Commerce Department showed an upward revision to second quarter growth in line
with expectations. Earnings news has been mixed, although Nike reported strong
results, thanks to the soccer World Cup. After a shaky start and subsequent
weakness, European stocks are mostly higher. The domestic markets may also
focus on geopolitical developments and a consumer sentiment reading due shortly
after the markets open.
U.S. stocks resumed their decline on Thursday amid overbought fears,
geopolitical tensions and economic fears. The major averages opened lower and
fell steadily until mid-day before moving sideways for the rest of the session.
The Dow Industrials ended down 264.26 points or 1.54 percent at 16,946,
the S&P 500 Index closed 32.31 points or 1.62 percent lower at 1,966, and
the Nasdaq Composite ended at 4,467, down 88.47 points or 1.94 percent. The
major averages all ended the session at their worst closing levels in over a
All thirty of the Dow components closed lower, with UnitedHealth (UNH), Microsoft
(MSFT), Johnson & Johnson (JNJ), American Express (AXP), Goldman
Sachs (GS) and JP Morgan Chase (JPM) leading the declines.
Airline, biotechnology, basic material, energy, financial,
housing, retail, computer hardware and semiconductor stocks all moved notably
to the downside.
On the economic front, the Labor Department reported that jobless claims
rose to a less than expected 293,000 in the week ended September 20th from
281,000 in the previous week. Meanwhile, the four-week average declined to
299,000 from 300,000. Continuing claims calculated with a week’s lag rose by
7,000 to 2.44 million in the week ended September 13th.
A separate report released by the Commerce Department showed that
durable goods orders tumbled by 18.2 percent month-over-month in August,
reversing most of the 22.5 percent jump in the previous month. Excluding
transportation, orders were up 0.7 percent. Non-defense capital goods orders,
excluding aircrafts and parts, used as a proxy for capital spending rose 0.6
percent, and shipments of this category of goods plugged into GDP calculations
were up 0.1 percent.
The results of Markit’s preliminary survey of the non-manufacturing sector
showed that the non-manufacturing index based on the survey remained unchanged
at 58.5 in September, belying expectations for an increase to 61.