US stocks eye drop with data deluge ahead; weekly gain in jeopardy
New York (Aug 14) US stocks looked poised to open with modest losses Friday, putting gains from the choppy week in jeopardy.
But a trio of economic reports still could shake up sentiment before the weekend, and J.C. Penney Co. shares are likely to see active trading as the retailer posts quarterly results.
S&P 500 futures ESU5, -0.28% dipped by 4.50 points, or 0.2%, to 2,076, while those for the Dow Jones Industrial Average DJU5, +0.00% stepped lower by 30 points, or 0.2%, to 17,339. Nasdaq 100 futures NQU5, -0.29% were down by 11.75 points, or 0.3%, to 4,505.50.
The S&P 500 SPX, -0.13% is on track to gain 0.3% for the week as of Thursday’s close, while the Dow DJIA, +0.03% is eyeing a 0.2% weekly rise. The Nasdaq COMP, -0.21% is down 0.2% for the week, bucking the slightly positive trend.
Earlier in the week, China’s devaluation of its currency sparked worries about the health of the global economy, hammering stocks and other riskier assets, while safety plays like gold gained. But U.S. stocks bounced back as the week progressed, with some strategists arguing that it’s an instance of solid fundamentals once again overcoming an outside shock.
Friday’s key economic reports: A reading on producer prices is expected at 8:30 a.m. Eastern, with economists polled by MarketWatch forecasting that the producer-price index rose 0.1% in July.
A report on July industrial production is due at 9:15 a.m., with a gain of 0.4% expected. And at 10 a.m., the University of Michigan’s consumer sentiment index is forecast to have dipped to 92.8 in August, down from 93.1 last month.
Angus Nicholson, market analyst at IG, said in a note Friday that “keen attention will be paid to U.S. industrial production and PPI numbers.” He said investors had seen a lower chance of the Federal Reserve raising interest rates in September after the yuan’s drop earlier in the week, but expectations now have returned somewhat.
“Every new data point continues to solidify the likelihood of a September rate hike,” said Nicholson, who is based in Australia. He added that trading in the days ahead “will largely be driven by the prospect of further strengthening in the U.S. dollar.”
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Other markets: European stocks SXXP, -0.44% traded lower Friday after initially rising as Greece approved its third bailout package. Asian markets ADOW, +0.12% and the yuan stabilized after a rocky week, while hard-hit oil CLU5, +0.09% dropped further. Gold GCZ5, +0.27% rose, and the dollar DXY, -0.21% slipped.
Movers & Shakers: Shares in J.C. Penney Co. JCP, -2.42% could make a notable move as the retailer delivers quarterly results before the opening bell. The company is expected to post a 50-cent loss in the second quarter on revenue of $2.8 billion, according to analysts polled by FactSet.
King Digital Entertainment PLC KING, -2.75% slumped 9.6% in premarket action after the game developer late Thursday reported a sharp slowdown in sales and bookings.
El Pollo Loco Holdings Inc. LOCO, -14.38% could also come under pressure after the fast-food chain on Thursday company reported weaker-than-expected revenue for the second quarter.
Meanwhile, Nordstrom Inc. JWN, -0.78% could gain after delivering stronger-than-expected profit late Thursday, and Tesla Motors Inc. TSLA, +1.82% rose in premarket action after pricing an increased share offering.
Source: MarketWatch
