American Stocks May Show Lack of Direction

By Investors Hub

The major U.S. index futures are pointing to a mixed opening on Friday following the strong upward move seen in the previous session. While the Dow futures are down by 45 points, the Nasdaq futures are up by 3 points.

Traders may be reluctant to make significant moves amid some uncertainty about the near-term outlook for the markets.

After moving lower over the two previous sessions, stocks showed a strong move back to the upside during trading on Thursday. With the upward move on the day, the Nasdaq reached a new record closing high.

The major averages ended the day firmly in positive territory. The Dow climbed 187.08 points or 0.8 percent to 23,458.36, the Nasdaq jumped 87.08 points or 1.3 percent to 6,793.29 and the S&P 500 advanced 21.02 points or 0.8 percent to 2,585.64.

The strength on Wall Street partly reflected a positive reaction to better than expected quarterly results from Wal-Mart (WMT) and Cisco Systems (CSCO).

Wal-Mart and Cisco surged up by 10.9 percent 5.2 percent, respectively, after both companies beat analyst estimates on both the top and bottom lines.

Stocks remained firmly positive after the House voted to approve the Republican tax reform bill, although final passage of legislation remains less than a certainty.

The House voted 227 to 205 in favor of their tax reform legislation known as the Tax Cuts and Jobs Act, with the vote coming down largely along party lines.

On the U.S. economic front, first-time claims for U.S. unemployment benefits unexpectedly increased in the week ended November 11th, according to a report released by the Labor Department.

The report said initial jobless claims rose to 249,000, an increase of 10,000 from the previous week’s unrevised level of 239,000. Economists had expected jobless claims to edge down to 235,000.

A separate report released by the Labor Department showed U.S. import prices rose by less than expected in the month of October.

The Labor Department said import prices rose by 0.2 percent in October after climbing by 0.8 percent in September. Economists had expected import prices to increase by 0.4 percent.

Meanwhile, the report said export prices were unchanged in October after increasing by 0.7 percent in the previous month. Export prices had been expected to climb by 0.4 percent.

Growth in Philadelphia-area manufacturing activity slowed by more than expected in the month of November, according to a report released by the Federal Reserve Bank of Philadelphia.

The Philly Fed said its diffusion index for current manufacturing activity in the region dropped to 22.7 in November from 27.9 in October.

While a positive reading still indicates growth in regional manufacturing activity, economists had expected the index to show a more modest decrease to 25.0.

The Federal Reserve also released a report showing industrial production in the U.S. increased by more than anticipated in the month of October.

The report said industrial production climbed by 0.9 percent in October after rising by an upwardly revised 0.4 percent in September.

Economists had expected production to rise by 0.5 percent compared to the 0.3 percent uptick originally reported for the previous month.

Additionally, the National Association of Home Builders released a report showing an unexpected improvement in homebuilder confidence in the month of November.

The report said the NAHB/Wells Fargo Housing Market Index rose to 70 in November from 68 in October. Economists had expected the index to be unchanged.

Computer hardware stocks showed a substantial move to the upside on the day, driving the NYSE Arca Computer Hardware Index up by 3.7percent.

NetApp (NTAP) led the hardware sector higher after the data storage company reported fiscal second quarter results that exceeded analyst estimates on both the top and bottom lines.

Significant strength was also visible among airline stocks, as reflected by the 2.3 percent gain posted by the NYSE Arca Airline Index. Hawaiian Airlines parent Hawaiian Holdings (HA) posted a standout gain.

Networking, retail, and biotechnology stocks also saw considerable strength, moving higher along with most of the other major sectors.