By Anora Mahmudova and Sara Sjolin, MarketWatch
Empire state index rebounds in May
U.S. stock futures pushed higher on Friday, as investors
assessed manufacturing data and their implications on the Federal
Reserve's monetary policy.
The Empire State manufacturing index, which rebounded slightly
in May, fell short of expectations, continuing the trends of
weakness in the economy.
Futures for the Dow Jones Industrial Average (YMM5) added 20
points, or 0.1%, to 18,221, indicating the blue-chip benchmark
could inch further toward an all-time closing high. On Thursday, it
ended just 0.2% shy of its record close of 18,288.63, hit March
2.
The S&P 500 index (SPX) managed to ring up a new closing
high on Thursday, and Friday looked set to be an upbeat trading
day, too. Futures for the index (ESM5) traded 2.5 points higher, or
0.1%, at 2,120.
Futures for the Nasdaq 100 index (NQM5) climbed about 11 points,
or 0.2%, to 4,501, after closing 1.4% higher on Thursday.
Craig Erlam, senior market analyst at OANDA, said the moves on
Friday reflected "calmness that has returned to the bond markets"
after a volatile week in fixed-income trading.
"Bond markets now appear to have stabilized, and if anything,
they're paring some of the losses, which is helping overall
sentiment," he said. "The perception that the Fed will be forced to
hold off on its first rate hike a little longer, following those
weak retail-sales figures on Wednesday, is also supporting equity
markets."
U.S. stocks have been weaving in and out of losses this week, as
investors digested the battered bond markets and a string of mixed
data that raised questions about the strength of the U.S. economy.
This has spurred speculation the Fed will wait to raise interest
rates until later this year, rather than in June, which some market
participants had been forecasting.
Former Fed Vice Chairman Donald Kohn said the debate over
rate-hike timing is focused on a move between September and
December
(http://www.marketwatch.com/story/feds-rate-hike-choice-is-september-or-december-kohn-says-2015-05-14).
Data: The Empire State manufacturing index moved back into
positive territory in May, but only barely. The index, a first
reading of manufacturing conditions in the month, inched up to 3.1
from negative 1.2 in April, the New York Fed said Friday. That was
below the MarketWatch-compiled economist forecast for a reading of
5.5.
At 9:15 a.m. Eastern, industrial production and capacity
utilization -- both for April -- are scheduled for release. The
University of Michigan reading on consumer sentiment comes out at
10 a.m. Eastern, and is predicted to show a pullback in May from
95.9 in April
(http://www.marketwatch.com/story/as-consumer-sentiment-perks-up-the-question-of-spending-looms-2015-05-01).
"Gasoline prices have risen in recent weeks, while equity-market
volatility has picked up as stock prices have declined. Both
factors suggest that sentiment may slip in May from the strong
April reading," analysts at Barclays said in a note.
Movers and shakers: Shares of Netflix Inc. (NFLX) rose 3.6% in
premarket trade after reports the entertainment-streaming service
is in talks with a Chinese media company to enter China's
online-video market
(http://www.bloomberg.com/news/articles/2015-05-15/netflix-said-in-talks-to-enter-china-with-jack-ma-backed-wasu).
Avon Products Inc.(AVP) gave up 2.4% ahead of the bell after
what appeared to be a bogus takeover offer on Thursday
(http://www.marketwatch.com/story/sec-looking-into-dubious-bid-for-avon-2015-05-15).
El Pollo Loco Holdings Inc.(LOCO) slumped as much as 12% after
the fast-food chain late Thursday reported sales below
forecasts.
King Digital Entertainment PLC(KING) slid 9% ahead of the bell
after the "Candy Crush" maker late Thursday reported a drop in
revenue
(http://www.marketwatch.com/story/candy-crush-maker-reports-higher-profit-2015-05-14).
On a more upbeat note, Yum! Brands Inc.(YUM) put on 1.1% after
the fast-food company was upgraded to overweight from neutral at
J.P. Morgan.
Shares of Nordstrom Inc.(JWN) climbed 1.2%, shaking off
weaker-than-expected earnings from late Thursday.
Other markets: European stock markets rose almost across the
board (http://www.marketwatch.com/storyno-meta-for-guid), building
on gains from Thursday when the European Central Bank's president,
Mario Draghi, underlined the bank's commitment to stimulus
efforts.
In Asia, Hong Kong's Hang Seng Index closed 2% higher
(http://www.marketwatch.com/storyno-meta-for-guid), boosted by talk
that a stock-connect program between Hong Kong and Shenzhen will be
announced as soon as this weekend.
Oil (http://www.marketwatch.com/storyno-meta-for-guid)(CLM5) and
most metals declined, while the ICE dollar index (DXY) moved a leg
higher to trim its weekly loss to 1.1%.
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