Stocks May Extend Yesterday's Late-Day Rally - U.S. Commentary

(RTTNews) - Following the rally seen late in the previous session, stocks may see some further upside in early trading on Friday. The major index futures are currently pointing to a higher open for the markets, with the Dow futures up by 52 points.

The upward momentum for the markets comes as traders continue to digest yesterday's release of the minutes of the latest Federal Reserve meeting.

The minutes showed that Fed members were concerned about global growth risks and decided it was prudent to wait for additional information before raising interest rates. Combined with recent jobs and trade data, the minutes helped reinforce the view that the Fed will not raise rates later this month and may delay its first rate hike into next year.

Paul Ashworth, Chief U.S. Economist at Capital Economics, said, "Admittedly, there are still two employment reports scheduled for release before the FOMC meets in December."

"But at this stage we think it would take a major turnaround in payroll growth, to well above 200,000 per month, to persuade officials to support a December rate hike," he added.

The markets may also benefit from a continued rally by commodities prices, which is likely to contribute to strength among resource stocks.

Buying interest may be somewhat subdued, however, as traders look ahead to next week's release of earnings news from a number of big name companies.

Johnson & Johnson (JNJ), Intel (INTC), JP Morgan (JPM), Bank of America (BAC), General Electric (GE), Citigroup (C), and Netflix (NFLX) are among the companies due to report their results.

Aluminum giant Alcoa (AA) unofficially kicked off the earning season after the close of trading on Thursday, reporting third quarter results that came in below analyst estimates.

On the U.S. economic front, the Labor Department recently released a report showing a modest drop in import prices in September, with a drop in non-fuel prices offsetting a rebound in fuel prices.

The report said import prices edged down by 0.1 percent in September after tumbling by a revised 1.6 percent in August. Economists had expected import prices to fall by 0.4 percent.

Additionally, the Labor Department said export prices dropped by 0.7 percent in September after slumping 1.4 percent in the previous month. Export prices had expected to dip by 0.2 percent.

After moving in opposite directions early on Thursday, stocks moved mostly higher in reaction to the minutes of the latest Federal Reserve meeting. The gains on the day extended a recent upward trend, with the Dow and the S&P 500 reaching their best closing levels in well over a month.

The major averages closed firmly positive but off their highs for the session. The Dow climbed 138.46 points or 0.8 percent to 17,050.75, the Nasdaq rose 19.64 points or 0.4 percent to 4,810.79 and the S&P 500 advanced 17.60 points or 0.9 percent to 2,013.43.

In overseas trading, stock markets across the Asia-Pacific region moved notably higher during trading on Friday. Japan's Nikkei 225 Index surged up by 1.6 percent, while China's Shanghai Composite Index jumped by 1.3 percent.

The major European markets are also seeing considerable strength on the day. While the German DAX Index is up by 1.4 percent, the French CAC 40 Index is up by 1.2 percent and the U.K.'s FTSE 100 Index is up by 1.1 percent.

In commodities trading, crude oil futures are climbing $0.94 to $50.37 a barrel after surging up $1.62 to $49.43 a barrel on Thursday. An ounce of gold is currently trading at $1,153, up $8.70 from the previous session's close of $1,144.30. On Thursday, gold slipped $4.40.

On the currency front, the U.S. dollar is trading at 120.26 yen compared to the 119.93 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.1366 compared to yesterday's $1.1276.