Dipo Olowookere
By Investors Hub
The major U.S. index futures are currently pointing to a higher opening on Friday, with stocks likely to extend the recovery from yesterday?s early weakness.
Renewed optimism about U.S.-China trade talks may generate some early buying interest after a report from CNBC said negotiations are set to resume October 10th in Washington.
A person close to the talks said Chinese Vice Premier Liu He will be representing the delegation from Beijing at the meetings.
The U.S. and China held deputy-level trade talks last week, although Treasury Secretary Steven Mnuchin called off a trip by Chinese officials to U.S. farms.
Stocks regained ground after coming under pressure in morning trading on Thursday but still ended the day moderately lower. With the pullback on the day, the major averages partly offset the notable gains posted on Wednesday.
While the major averages climbed well off their worst levels, they still closed in negative territory. The Dow fell 79.59 points or 0.3 percent to 26,891.12, the Nasdaq slid 46.72 points or 0.6 percent to 8,030.66 and the S&P 500 dipped 7.25 points or 0.2 percent to 2,977.62.
The weakness on Wall Street came amid renewed political uncertainty following the release of the whistleblower complaint that sparked the impeachment inquiry into President Donald Trump.
The document outlines concerns about Trump “using the power of his office to solicit interference from a foreign country in the 2020 U.S. election.”
“This interference includes, among other things, pressuring a foreign country to investigate one of the President’s main domestic political rivals,” the complaint reads.
The complaint relates to Trump’s calls on Ukrainian President Volodymyr Zelensky to conduct an investigation of former Vice President Joe Biden, the frontrunner for the Democratic presidential nomination.
On the U.S. economic front, the Commerce Department released its final report on U.S. gross domestic product in the second quarter, showing the pace of GDP growth was unrevised from the previous estimate.
The report said real GDP increased at an annual rate of 2.0 in the second quarter, unchanged from the previous estimate and in line with economist estimates.
The unrevised 2.0 percent GDP growth in the second quarter still reflects a notable slowdown compared to the 3.1 percent jump in the first quarter.
Meanwhile, a separate report from the National Association of Realtors showed a much bigger than expected rebound in pending home sales in the month of August.
NAR said its pending home sales index surged up by 1.6 percent to 107.3 in August after plunging by 2.5 percent to 105.6 in July. Economists had expected pending home sales to climb by 0.9 percent.
A pending home sale is one in which a contract was signed but not yet closed. Normally, it takes four to six weeks to close a contracted sale.
Energy stocks turned in some of the market’s worst performances on the day even though the price of crude oil climbed well off its worst levels.
Reflecting the weakness in the energy sector, the Philadelphia Oil Service Index tumbled by 2.7 percent, the NYSE Arca Natural Gas Index slumped by 1.4 percent and the NYSE Arca Oil Index fell by 1.1 percent.
Significant weakness also emerged among biotechnology stocks, as reflected by the 2.2 percent nosedive by the NYSE Arca Biotechnology Index. The index ended the session at an eight-month closing low.
Steel, gold, and brokerage stocks also saw notable weakness on the day, while most of the other major sectors showed more modest moves.
