US stocks: Dow futures surge 200 points after Yellen speech
New York (Sept 25) US stocks looked on track to open sharply higher Friday, helped by Federal Reserve chief Janet Yellen signaling the economy is strengthening and an interest-rate hike is likely this year.
Investors also are bracing for fresh readings on consumer sentiment and the U.S. economy’s growth.
Dow Jones Industrial Average futures YMZ5, +1.51% climbed by 257 points, or 1.6%, to 16,356, while those for the S&P 500 ESZ5, +1.40% jumped by 29.95 points, or 1.6%, to 1,948.75. Nasdaq 100 futures NQZ5, +1.30% tacked on 61.75 points, or 1.5%, to 4,307.75.
“Prospects for the U.S. economy generally appear solid,” Yellen said in a speech late Thursday after U.S. markets had closed. Signs of weak growth overseas won’t prove large enough to have a significant impact on policy, said the Fed chairwoman, whose remarks were briefly upstaged when she faltered and appeared to feel ill.
The optimism among investors on Friday morning is “mainly due” to Yellen’s speech, said Naeem Aslam, chief market analyst at AvaTrade, in a note. Talk of a rate rise thanks to a solid U.S. economy should be “good news,” though there are still “cracks” in the manufacturing sector, Aslam said. “Caterpillar CAT, -6.27% is a primary example of this,” he added, referring to the machinery giant’s announcement Thursday that it’s cutting thousands of jobs due to weak demand.
On Thursday, the Dow DJIA, -0.48% and S&P 500 SPX, -0.34% closed lower for a third day in a row. For the week, the Dow is down 1.1% as of Thursday’s close, while the S&P has dropped 1.3%.
Other markets: European stocks SXXP, +3.06% shot higher, with Yellen’s remarks getting some credit for the gains. Asian equities were mixed, while crude oil CLX5, +0.94% and the dollar DXY, +0.14% both advanced. Gold GCZ5, -0.89% pulled back.
Economic reports: A third estimate for U.S. second-quarter gross domestic product is due at 8:30 a.m. Eastern Time, with economists polled by MarketWatch expecting growth of 3.7%.
A September figure for consumer sentiment is expected at 10 a.m., and economists forecast a reading of 87.0. Check out: MarketWatch’s Economic Calendar
Stocks to watch: Shares in Nike Inc. NKE, +8.67% could gain in Friday’s session after jumping late Thursday as the company delivered an upbeat quarterly earnings report.
Bed Bath & Beyond Inc. BBBY, -0.85% shares also could see active trading after falling late Thursday as quarterly same-store sales missed forecasts, while Finish Line Inc. FINL, -1.86% is due to deliver results before the opening bell.
Source: MarketWatch
