European Optimism May Help Sustain Positive Momentum
– The major U.S. index futures are pointing to a higher opening on Friday, with the political developments in Greece and Italy offering some consolation that the contagion fears may not worsen. Suring European bonds yields eased in reaction to the developments. Additionally, strong earnings reported by Dow component Disney (DIS) could offer some encouragement. Traders may also look ahead to a consumer sentiment report due for release shortly after the markets open.
Given the fragile mood of consumers, expectations concerning consumer sentiment are muted. That said, consumers have shown surprising resilience and have continued to buy by dipping into their savings. Technically, the Dow Industrials is tantalizingly close to making an attempt at its 200-day moving average. A convincing break above this resistance may help the markets sustain the gains.
U.S. stocks rose on Thursday, although amid caution, after the European Central Bank reportedly bought Italian bonds to bring down surging bond yields. The changing of guard underway in Italy and Greece, which are currently in the epicenter of the debt crisis, and some positive domestic economic readings also lent some support. The major averages opened higher but saw considerable volatility throughout the session before closing higher.
The Dow Industrials added 112.85 points or 0.96 percent before closing up at 11,894 and the S&P 500 Index ended at 1,240, a gain of 10.59 points or 0.86 percent. Meanwhile, the Nasdaq Composite Index ended up 3.50 points or 0.13 percent at 2,625.
Twenty-eight of the thirty Dow components closed higher, with Cisco Systems (CSCO) leading the gains with an over 5.50 percent jump in reaction to its quarterly results. Disney (DIS), Merck (MRK) and Pfizer (PFE) also advanced strongly. On the other hand, Bank of America (BAC) fell 2.11 percent.
Commodity, Currency Markets
Crude oil futures are rising $0.64 to $98.42 a barrel after advancing $2.04 to $97.78 a barrel on Thursday. Gold futures are currently rising $14.10 to $1,773.70 an ounce. In the previous session, the precious metal fell $32 to $1,759.60 an ounce.
Among currencies, the U.S. dollar is trading at 77.35 yen compared to the 77.6495 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.3658 compared to yesterday’s $1.3607.
Asia
The major Asian markets closed mostly higher, tracking the positive lead from Wall Street overnight. South Korea’s Kospi led the gains in the region with a 2.77 percent advance. Australia’s All Ordinaries rose 1.19 percent, while Japan’s Nikkei rose a more modest 0.16 percent.
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