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| | US Market | | The major U.S. index futures are pointing to a notably lower opening on Friday, with sentiment reflecting extreme risk aversion amid the release of some disappointing earnings from companies such as Amazon. Adding to concerns, department store giant Wal-Mart made negative pre-announcement, raising doubts about the recovery in consumer spending. Meanwhile, an economic report released earlier in the day showed a smaller than expected increase in personal income, while the personal spending growth exceeded estimates. Traders may also look ahead to a consumer sentiment and manufacturing reading, both due to be released shortly after the markets open.
U.S. stocks staged a remarkable turnaround on Thursday, helped by some positive earnings and in line fourth quarter GDP data. The major averages opened higher and advanced steadily until the mid-session. Thereafter, the averages moved roughly sideways before closing notably higher.
The Dow Industrials ended up 109.82 points or 0.70 percent at 15,849, the S&P 500 Index closed 19.99 points or 1.13 percent higher at 1,794 and the Nasdaq Composite closed at 4,123, up 71.69 points or 1.77 percent.
Fifteen of the thirty Dow components closed higher, with Caterpillar , Merck , Disney , Pfizer and UnitedHealth leading the gains. On the other hand, 3M Co. , Boeing , Exxon Mobil and Procter & Gamble retreated notably.
Biotechnology, utility, transportation, retail, Semiconductor and financial stocks were among the best performers of the session, while Gold stocks bucked the uptrend.
On the economic front, The Commerce Department reported that U.S. fourth quarter GDP rose 3.2 percent quarter-over-quarter, in line with expectations. Personal spending contributed 2.25 percentage points to GDP growth by virtue of its 3.3 percent increase. Inventory build up also contributed to growth. Trade accounted for 1.33 percentage points of the growth, as export growth at 11.4 percent outpaced the 0.9 percent increase in imports. At the same time, government spending deducted from the growth. Spending on equipment was up 6.9 percent, while residential construction spending fell by 9.8 percent.
Meanwhile, the Labor Department reported that jobless claims rose to 348,000 in the week ended January 25th from an upwardly revised reading of 329,000 for the previous week. The four-week average rose slightly to 333,000 from 332,000. At the same time, continuing claims calculated with a week's lag fell by 16,000 to 2.991 million in the week ended January 18th.
A National Association of Realtors report showed that pending home sales fell 8.7 percent month-over-month in December, with the index dropping to the lowest level since October 2011. Annually, pending home sales were down 8.8 percent. Pending home sales fell in each of the four geographic regions. The weakness stemmed mainly from adverse weather conditions.
Notwithstanding yesterday's upside, The Dow Industrials is still locked in its recent consolidation region. On the downside, the index has solid support in the form of its 100-day moving average (currently at 15,783). Aside from the MA, the index also has support around the 15,816, 15,743 and 15,681 levels. On the upside, key resistance areas can be seen around 15,890, 15,968, 16,010, 16,062 and 16,167.
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Personal income in the U.S. came in nearly unchanged in the month of December, according to a report released by The Commerce Department on Friday, although the report still showed a bigger than expected increase in personal spending for the month.
The Commerce Department said personal income inched up by less than a tenth of a percent in December after rising by 0.2 percent in November. Economists had been expecting another 0.2 percent increase.
At the same time, the report said personal spending climbed by 0.4 percent in December following a 0.6 percent increase in the previous month. The spending growth exceeded economist estimates for a 0.2 percent uptick.
Around the same time, the Labor Department is scheduled to release its employment cost index for the fourth quarter. The employment cost index is estimated to have increased by 0.4 percent, the same pace of growth as in the previous quarter.
MNI Indicators is due to release the results of its manufacturing survey for the Chicago region at 9:45 am ET. The consensus estimates call for a modest increase in the index to 59.5 in January from 59.1 in December.
The business barometer slid to 59.1 in December from 63 in November. The new orders index declined 8 points to 60.7 and the order backlogs index moved down 1.5 points to 58.3. The employment index declined 9.3 points to 51.6, the lowest level since April, and the inventories index fell steeply to 43.9 from 61.1.
Reuters and the University of Michigan are scheduled to release the revised estimates for their consumer sentiment index for January at 9:55 am ET. Economists expect an upward revision to the index to 81 from the mid-month reading of 80.4.
Dallas Federal Reserve Bank President Richard Fisher will speak on Fed operations and the economic outlook in Fort Worth at 4:15 pm ET.
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| | Stocks in Focus | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  |  |  |  | | Please click on the images to view our interactive charts | | | Google reported fourth quarter adjusted earnings of $12.01 per share on revenues of $16.86 billion. The earnings were shy of estimates, while the revenues exceeded estimates.
Amazon reported fourth quarter earnings of 51 cents per share on net sales of $25.59 billion, up 20 percent. For the first quarter, the company expects an operating loss of $200 million to an operating profit of $200 million on net sales of $18.2 billion to $19.9 billion. The results trailed expectations and the guidance was lackluster.
Zynga's fourth quarter net loss narrowed from the prior year period. The company also announced an agreement to acquire privately-held NaturalMotion, a mobile game and technology developer, for approximately $527 million. The company also plans to reduce approximately 314 employees, representing 15 percent of its current workforce.
Wal-Mart announced that it currently expects underlying earnings per share for the fourth quarter and fiscal 2014 to be at or slightly below the low end of its previously announced guidance range. In addition, the company expects both Walmart U.S. and Sam's Club comp store sales, without fuel, for the 14-week period ending Jan. 31, 2014, to be slightly negative to the guidance provided in its third quarter report.
Mattel (MAT) reported fourth quarter profit that improved from the previous year period, but missed Wall Street view. Worldwide net sales declined 6 percent and missed the consensus estimate.
Broadcom's fourth quarter results exceeded estimates. The company's first quarter revenue guidance was also in line. PMC-Sierra also reported better than expected fourth quarter results.
Celestica's fourth quarter earnings beat estimates, while its revenues were shy of estimates. The company's first quarter earnings guidance was in line, while its revenue guidance was weak.
Wynn Resorts' fourth quarter results were better than expected.
Reinsurance Group of America reported fourth quarter operating income of $2.17 per share on revenues of $2.74 billion. The results exceeded estimates. Over the medium term, the company expects operating income per share growth of 5-8 percent and operating return of equity of 11-12 percent.
Manitowoc reported fourth quarter adjusted earnings from continuing operations of 47 cents per share on sales of $1.10 billion, down 2.1 percent year-over-year. The earnings exceeded estimates, while the revenues were shy of estimates.
Emulex reported second quarter non-GAAP earnings of 21 cents per share on net revenues of $123 million. The results exceeded estimates. For the third quarter, the company expects non-GAAP earnings of 14-17 cents per share on revenues of $110 million to $114 million. The earnings guidance was in line, while the revenue guidance was shy of estimates.
CSC reported third quarter earnings from continuing operations of 98 cents per share on revenues of $3.23 billion, down 7 percent year-over-year. The results exceeded estimates and the revenues were in line. The company raised its earnings from continuing operations guidance for 2014 to $3.80-$3.90 per share.
Microchip Technology's third quarter results were better than expected.
Boyd Gaming lowered its fourth quarter adjusted EBITDA guidance to the low end of its previously announced guidance range of $105 million to $110, citing unusually low hold percentage and severe winter weather during two weekends at Borgata. The company also said it expects an adjusted loss of 21-27 cents per share compared to its previous estimate for a loss of 15-20 cents per share.
Polaris Industries announced a 14 percent increase in its dividend to 48 cents per share.
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| | European Market | | European stocks saw some volatility in early trading and have pulled back since then.
On the economic front, the results of a survey by GfK NOP showed that consumer confidence rose to -7 in December from -13 in November. A report released by the German Federal Statistical Office showed that German retail sales fell unexpectedly in December. Retail sales fell 2.5 percent month-over-month, contrasting expectations for a 0.2 percent increase.
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| | Asian Markets | | | | USDCAD | USDEUR | USDGBP | USDJPY |  |  |  |  | | Please click on the images to view our interactive charts | | | The major Asian markets that were open for trading closed on a mixed note, with the Japanese market ending lower on the yen's rebound, while the Australian and New Zealand market advanced. The Chinese, Hong Kong, Malaysian, Indonesian, Singaporean, Taiwanese and South Korean markets were all closed for the Lunar New Year holiday.
Japan's Nikkei opened higher and held above the unchanged line until the afternoon. With the yen strengthening in the wake of some strong domestic data, the index retreated below the unchanged line and languished in the red thereafter. The index ended down 92.53 points or 0.62 percent at 14,915.
Export stocks led the declines, with Toshiba, Kawasaki Kisen Kaisha, Fuji Electric and Casio Computer among the worst performers of the session. On the other hand, Fujitsu and NEC rallied over 10 percent each.
Australia's All Ordinaries ended a volatile session modestly higher, with the index see-sawing throughout the session before ending up 5.70 points or 0.11 percent at 5,205. Consumer, industrial, telecom and utility stocks gained ground, while material, financial and energy stocks lost ground.
On the economic front, a slew of data released from Japan showed that efforts initiated by the Japanese government to fight deflation is slowly and steadily coming to fruition. The Ministry of Economy, Trade and Industry showed that industrial production in Japan rose 1.1 percent in December following a 0.1 percent increase in November. Economists expected a 1.3 percent increase for the month.
A Ministry of Internal Affairs and Communication report showed that core consumer prices in Japan rose 1.3 percent annually in December compared to expectations for a 1.2 percent increase. A separate report showed that the jobless rate came in at 3.7 percent, better than the 3.9 percent rate expected by economists. Additionally, household spending rose 0.7 percent year-over-year in December compared to expectations for a 1.1 percent increase.
The Ministry of Land, Infrastructure, Transport and Tourism reported that housing starts rose 18 percent year-over-year in December, faster than the 14.1 percent rate in November and the 13.6 percent rate expected by economists.
Producer prices in Australia rose 0.2 percent sequentially in the fourth quarter, according to estimates released by the Australian Bureau of Statistics. This followed a 1.3 percent increase in the third quarter.
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| | Currency and Commodities Markets | | Crude Oil futures are receding $0.77 to $97.46 a barrel after rising $0.87 to $98.23 a barrel on Thursday. Gold futures are currently climbing $10.10 to $1,252.60 an ounce. In the previous session, Gold fell $19.70 to $1,242.50 an ounce.
Among currencies, the U.S. dollar is trading at 102.25 yen compared to the 102.72 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.3517 compared to yesterday's $1.3555.
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