U.S. Stocks May See Further Upside In Early Trading

Stocks are likely to move to the upside in early trading on Friday, extending the rally seen over the two previous sessions. The major index futures are currently pointing to a higher open for the markets, with the S&P 500 futures up by 0.5 percent.

A positive reaction to the latest batch of earnings news from big-name companies is likely to contribute to continued strength on Wall Street.

Shares of Amazon (AMZN) are moving sharply higher in pre-market trading after the online retail giant reported better than expected second quarter revenues and provided upbeat guidance.

Tech giant Apple (AAPL) is also likely to see initial strength after reporting fiscal third quarter results that exceeded analyst estimates on both the top and bottom lines.

On the other hand, shares of Intel (INTC) are likely to come under pressure after the semiconductor giant reported weaker than expected second quarter results and provided disappointing guidance for the current quarter.

Early buying interest may also be offset by a report from the Commerce Department showing an acceleration in the pace of consumer price growth.

The report showed the annual rate of growth by the personal consumption expenditures price index accelerated to 6.8 percent in June from 6.3 percent in May, showing the fastest growth since January 1982.

The annual rate of growth by core consumer prices, which exclude food and energy prices, also accelerated to 4.8 percent in June from 4.7 percent in May.

The inflation data, which is said to be preferred by the Federal Reserve, was included in a report showing personal income increased by slightly more than expected in the month of June.

The faster rate of price growth may offset recent optimism about the Fed slowing the pace of interest rate hikes at upcoming meetings.

Just after the start of trading, MNI Indicators is scheduled to release its report on Chicago-area business activity in the month of July. The Chicago business barometer is expected to edge down to 55.0 in July from 56.0 in June, although a reading above 50 would still indicate growth.

The University of Michigan is also due to release its revised reading on consumer sentiment in the month of July. The consumer sentiment index for July is expected to be unrevised from the preliminary reading of 51.1, which was up from a record low 50.0 in June.

Stocks showed a substantial turnaround over the course of the trading session on Thursday, recovering from an early move to the downside to end the day sharply higher. The major averages added to the strong gains posted on Wednesday to reach their best closing levels in well over a month.

The major averages pulled back off their highs of the session going into the close but remained firmly positive. The Dow jumped 332.04 points or 1 percent to 32,529.63, the Nasdaq shot up 130.17 points or 1.1 percent to 12,162.59 and the S&P 500 surged 48.82 points or 1.2 percent to 4,072.43.

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance on Friday. Hong Kong’s Hang Seng Index plunged by 2.3 percent and Japan’s Nikkei 225 Index edged down by 0.1 percent, while Australia’s S&P/ASX 200 Index advanced by 0.8 percent.

Meanwhile, the major European markets have also moved to the upside on the day. While the French CAC 40 Index has surged by 1.5 percent, the German DAX Index is up by 1.2 percent and the U.K.’s FTSE 100 Index is up by 0.6 percent.

In commodities trading, crude oil futures are jumping $1.74 to $98.16 a barrel after falling $0.84 to $96.42 a barrel on Thursday. Meanwhile, after surging $31.20 to $1,750.30 an ounce in the previous session, gold futures are climbing $8.80 to $1,759.10 an ounce.

On the currency front, the U.S. dollar is trading at 134.08 yen versus the 134.27 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.0181 compared to yesterday’s $1.0197.

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