Markets May Rebound Ahead Of Bernanke Speech

(RTTNews) - The major U.S. index futures are pointing to a higher opening on Friday, with stocks likely to regain some ground following the sharp pullback that was seen in the previous session. Trading activity is likely to be relatively subdued, however, as a winter storm menacing the Northeast is likely to keep some traders away from their desks.

A lack of major U.S. economic data is also likely to keep traders on the sidelines, although comments from several Federal Reserve officials may attract some attention. Remarks from Fed Chairman Ben Bernanke are likely to be the main attraction, as the speech is expected to be one of Bernanke's last public appearances before the end of his eight-year run as the Chairman of the Fed at the end of the month.

U.S. stocks retreated on Thursday amid the release of some soft manufacturing data China, which traders used as an excuse to take profits on recent gains. The major U.S. averages opened lower and declined steadily until late afternoon trading before moving roughly sideways and closing notably lower. European stocks also closed Thursday's session on a markedly downbeat note.

The Dow Industrials ended down 135.31 points or 0.82 percent at 16,441, the S&P 500 Index closed 16.38 points or 0.89 percent lower at 1,832 and the Nasdaq Composite Index slid 33.52 points or 0.80 percent before closing at 4,143.

Twenty-eight of the thirty Dow components closed lower, with Cisco Systems (CSCO), DuPont (DD), General Electric (GE), Coca-Cola (KO) and 3M Co. (MMM) leading the declines.

Transportation, utility, energy, basic material, housing, semiconductor and computer hardware stocks came under selling pressure, while gold stocks rallied.

On the economic front, the results of the Institute for Supply Management's manufacturing survey showed that its manufacturing purchasing managers' index for the U.S. edged down to 57 in December from 57.3 in November. The new orders index rose 0.6 points to 64.2, while the order backlogs index slipped 2.5 points. The employment index edged up to 56.9 from 56.5, reaching the highest level since June 2011. Of the 18 industries surveyed, 13 industries reported growth.

The Labor Department reported that jobless claims fell to 339,000 in the week ended December 28th from 341,000 in the previous week. At the same time, the four-week average rose to 357,000 from 349,000. Continuing claims calculated with a week's lag slipped to 2.93 million in the week ended December 21st from 2.83 million in the week ended December 14th.

A separate government report showed that construction spending rose 1 percent month-over-month in November. Annually, construction spending was up 5.9 percent. Private construction spending climbed 2.2 percent, while spending on public construction fell 1.8 percent. In the private category, residential and non-residential construction spending rose 1.9 percent and 2.7 percent, respectively.

Commodity, Currency Markets

Crude oil futures are sliding $0.31 to $95.13 a barrel after plunging $2.98 to $95.44 a barrel on Thursday. Gold futures, which jumped $22.90 to $1,225.20 an ounce in the previous session, are climbing $3.40 to $1,228.60 an ounce.

On the currency front, the U.S. dollar is trading at 104.41 yen compared to the 104.81 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.3637 compared to yesterday's $1.3672.

Asia

The major Asian markets saw notable weakness, dragged lower by the weak cues from Wall Street overnight. Leading the declines in the region were the Chinese, Hong Kong, Indonesian, Singaporean and South Korean markets, where the averages ended down over 1 percent each. The Japanese market remained closed for a public holiday.

Australia's All Ordinaries opened lower and declined sharply in early trading before moving roughly sideways by the mid-session. Thereafter, the average recouped some of the losses and ended down 18 points or 0.34 percent at 5,352. Energy, material and financial stocks were among the worst performers of the session.

China's Shanghai Composite ended down 26.25 points or 1.24 percent after a steep decline in early trading. A report released by the China Federation of Logistics and Purchasing showed that growth in non-manufacturing activity in China slowed in December, with the corresponding index slipping 1.4 points to 54.6.

Hong Kong's Hang Seng Index closed 522.77 points or 2.24 percent lower at 22,817, Indonesia's Jakarta Composite dropped 1.61 percent and South Korea's Kospi fell 1.07 percent.

Europe

After seeing some volatility in early trading, the major European markets have moved to back the upside following yesterday's sell-off. While the U.K.'s FTSE 100 Index has risen by 0.3 percent, the German DAX Index and the French CAC 40 Index are up by 0.5 percent and 0.7 percent, respectively.

In corporate news, U.K.- based retailer Next reported strong sales growth for the first two months of the fourth quarter and raised its profit forecast for the year. The company also announced a special dividend. Remy Cointreau announced that its CEO Frederic Pflanz has resigned for personal reasons.

On the economic front, a report released by Nationwide showed that house prices in the U.K. rose 8.4 percent year-over-year in December. The increase was stronger than the 7.1 percent growth expected by economists.

The growth in the U.K. construction sector moderated in December, as new order inflows eased, according to the results of a survey by Markit Economics and the Chartered Institute of Purchasing and Supply. The headline seasonally-adjusted purchasing managers' index fell to 62.1 in December from the 75-month peak of 62.6 in November. Economists had forecast a decline to 62.

U.S. Economic Reports

Automakers are scheduled to release their monthly sales results for December. Economists estimate total vehicle sales to come in at a seasonally adjusted annual rate of 16 million units for the month compared to 16.4 million in November.

Federal Reserve Governor Jeremy Stein will moderate a panel on shadow banking in Philadelphia at 10:15 am ET. The Philadelphia Fed's Charles Plosser will be on a panel on the global economy in a low interest rate environment in Philadelphia at 10:15 am ET and 12:45 am ET.

The Energy Information Administration is scheduled to release its weekly petroleum status report for the week ended December 27th at 11 am ET.

Crude oil stockpiles fell by 4.7 million barrels to 367.6 million barrels in the week ended December 20th. Inventories were near the upper limit of the average range for this time of the year. Gasoline inventories edged down by 0.6 million barrels yet were in the upper half of the average range.

Distillate stockpiles fell by 1.9 million barrels and were below the lower limit of the average range. Refinery capacity utilization averaged 92.3 percent over the four weeks ended December 20th compared to 91.5 percent over the four weeks ended December 13th.

Fed Gov. Jeremy Stein is also scheduled to speak on banks as patient debt investors in Philadelphia at 1:15 pm ET. Richmond Fed President Jeffrey Lacker is due to speak on the economic outlook in Baltimore at 1:30 Pm ET.

Additionally, Federal Reserve Chairman Ben Bernanke will speak on the changing Fed in Philadelphia at 2:30 pm ET.

Stocks in Focus

Resources Connection (RECN) reported second quarter earnings of 18 cents per share, up from 14 cents per share last year. Revenues rose 3.4 percent to $146 million. The revenues were ahead of estimates.

Canadian Pacific (CP) announced that it has agreed to sell the west end of its Dakota, Minnesota & Eastern line to Genesee & Wyoming (GWR) for $210 million. The asset sale is expected to close by mid-2014.