Modupe Gbadeyanka
By Investors Hub
The major U.S. index futures are pointing to a modestly lower opening on Friday following the lackluster performance seen in the previous session.
Trading activity on the day may be somewhat subdued, with a lack of major U.S. economic data keeping some traders on the sidelines.
Uncertainty about the near-term outlook for the markets may also contribute to choppy trading following the recent move to record highs by the major averages.
Earnings news is likely to attract attention, however, with several big-name companies recently releasing the quarterly results.
Stocks showed a lack of direction over the course of the trading session on Thursday, with the major averages bouncing back and forth across the unchanged line. Despite the lackluster performance, the tech-heavy Nasdaq reached a new record closing high.
The major averages finished the day on opposite sides of the unchanged line. While the Nasdaq inched up 4.96 points or 0.1 percent to 6,390.00, the Dow dipped 28.97 points or 0.1 percent to 21,611.78 and the S&P 500 edged down 0.38 points or less than a tenth of a percent to 2,473.45.
The choppy trading on Wall Street partly reflected uncertainty about the outlook for the markets after the major averages reached new record closing highs on Wednesday.
Traders were also digesting the European Central Bank’s monetary policy decision, with the bank leaving its key interest rates unchanged.
The ECB also reiterated its plan to purchase 60 billion euros worth of government bonds and other assets each month through December, or beyond, if necessary.
Additionally, the ECB noted it stands ready to increase the program in terms of size or duration if the outlook becomes less favorable.
ECB President Mario Draghi indicated in his subsequent press conference that the asset purchase program would continue until there is a sustained adjustment in the path of inflation consistent with the bank’s target.
On the U.S. economic front, a report released by the Labor Department showed a much bigger than expected decrease in first-time claims for U.S. unemployment benefits in the week ended July 15th.
The report said initial jobless claims fell to 233,000, a decrease of 15,000 from the previous week’s revised level of 248,000. Economists had expected jobless claims to edge down to 245,000.
The Federal Reserve Bank of Philadelphia also released a report showing that regional manufacturing activity grew at a notably slower rate in the month of July.
The Philly Fed said its index for current manufacturing activity in the region slumped to 19.5 in July from 27.6 in June.
While a positive reading still indicates growth in regional manufacturing activity, economists had expected the index to show a much more modest drop to 24.0.
Meanwhile, the Conference Board said its index of leading economic indicators rose by more than expected in the month of June.
The Conference Board said its leading economic index climbed by 0.6 percent in June after rising by a revised 0.2 percent in May. Economists had expected the index to rise by 0.4 percent
Telecom stocks showed a significant move to the downside on the day, dragging the NYSE Arca Telecom Index down by 2.1 percent. With the drop, the index fell to its lowest closing level in a year.
Communications chip maker Qualcomm (QCOM) posted a notable loss after reporting third quarter results that beat estimates but providing disappointing guidance.
Considerable weakness was also visible among trucking stocks, as reflected by the 2.1 loss posted by the Dow Jones Trucking Index. C.H. Robinson (CHRW) led the trucking sector lower after reporting second quarter earnings that came in below analyst estimates.
Railroad and oil service stocks also came under pressure on the day, while notable strength was visible among biotechnology and pharmaceutical stocks.
Within the biotech sector, Sarepta Therapeutics (SRPT) moved sharply higher after the biopharmaceutical company reported a narrower than expected second quarter loss.
