Sentiment Guarded Amid Risks

(RTTNews) - The major U.S. index futures are pointing to a lower opening on Friday, with sentiment remaining fragile as geopolitical risks and economic uncertainty abounds. The economic risks posed by aggravation of the crises in the Middle east and Ukraine is too huge for the markets to ignore. Meanwhile, offering little clarity to the monetary policy outlook, a report released a short while ago showed that retail sales rose in line with estimates. Although a consumer sentiment data due after the markets open may have some impact on the markets, traders may hesitate to build on their positions.

U.S. stocks ended Tuesday's session narrowly mixed after seeing modest weakness for much of the session. The major averages opened lower and fell further in late morning trading amid the looming threat of strife in Iraq and Syria, as the U.S. stepped up its rhetoric against ISIS. However, the averages staged a recovery in late-day trading to end the day mixed.

The Dow Industrials ended down 19.71 points or 0.12 percent at 17,049, while the S&P 500 Index closed 1.76 points or 0.09 percent hiher at 1,998 and the Nasaq Composite ended up 5.28 points or 0.12 percent at 4,592.

The breadth among the Dow components was even, with 15 stocks ending lower, while the remaining 15 stocks declined. Visa (V) fell the most among the Dow components, while Cisco Systems (CSCO) and JP Morgan Chase (JPM) gained ground.

Biotechnology stocks were among the worst performers of the session, while utilities, brokerage and gold stocks moved to the upside.

On the economic front, the Labor Department reported that jobless claims rose to 315,000 in the week ended September 6th from 304,000 in the previous week. The four-week average climbed to 304,000 from 303,250,

Continuing claims calculated with a week's lag also rose to 2.487 million in the week ended August 30th from a 7-year low of 2.478 million in the previous week.

Commodity, Currency Markets

Crude oil futures are edging down $0.08 to $92.75 a barrel after jumping $1.16 to $92.83 a barrel on Thursday. Meanwhile, gold futures are slipping $2.30 to $1,236.70 an ounce. In the previous session, gold fell $6.30 to $1,239 an ounce.

Among currencies, the U.S. dollar is trading at 107.13 yen compared to the 107.11 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.2954 compared to yesterday's $1.2925.

Asia

The major Asian markets went about in a listless manner, with the lackluster performance on Wall Street hurting sentiment. Geopolitical concerns following the imposition of EU sanctions on Russia and the U.S. pledge to take on ISIS militants in Iraq and Syria also served to dampen the mood.

The Japanese market stayed afloat for the fifth straight day, as the dollar strengthened against the yen. The Nikkei 225 opened lower but recovered in late morning trading. After advancing steadily for the rest of the morning, the index gave back some ground in the afternoon yet closed up 39.09 points or 0.25 percent at 15,948.

Australia's All Ordinaries languished below the unchanged line for much of the session before ending down 14.60 points or 0.26 percent at 5,532. A majority of stocks declined, led lower by telecom and IT stocks, while material and real estate stocks gained ground.

Hong Kong's Hang Seng Index closed at 24,595, down 67.32 points or 0.27 percent, while China's Shanghai Composite Index ended at 2,332, up 20.27 points or 0.88 percent.

On the economic front, a reported released by the People's Bank of China showed that bank lending in China rose to 702.5 billion yuan in August from 385.2 billion yuan in July.

A separate report showed that China's M2 money supply rose 12.8 percent year-over-year in August, while economists expected a 13.5 percent increase.

Revised estimates released by Japan's Ministry of Economy, Trade and Industry showed that industrial output rose 0.4 percent month-over-month, faster than the 0.2 percent growth initially estimated. Annually, production was down a less than initially estimated 0.7 percent.

Europe

European stocks opened higher but turned mixed immediately after in the wake of geopolitical threats and a lack of major directional cues.

On the economic front, Germany's Federal Statistical Office reported that wholesale prices in Germany fell 0.6 percent year-over-year in August following a 0.7 percent drop in July. The drop was the smallest since July 2013. On a monthly basis, prices fell 0.2 percent, reversing some of the 0.1 percent increase in July.

A report released by the U.K. Office for National Statistics showed that construction sector output unexpectedly stagnated in July following a 1.2 percent increase in June. Economists expected construction output to have risen 0.6 percent.

Meanwhile, a leading economic index that measures economic performance in the U.K. in the future rose at a slower rate of 0.1 percent in July, according to a separate report released by the Conference Board.

Eurostat reported that eurozone industrial output grew 1 percent month-over-month in July, reversing the 0.3 percent fall in June. Economists had forecast 0.7 percent growth. Annually, industrial production growth accelerated to 2.2 percent.

A separate report showed that the number of employed people in the eurozone rose 0.2 percent sequentially in the second quarter, faster than the 0.1 percent increase in the first quarter.

U.S. Economic Reports

With auto sales showing a significant increase, the Commerce Department released a report on Friday showing that U.S. retail sales increased in line with economist estimates in the month of August. The report said retail sales climbed by 0.6 percent in August following an upwardly revised 0.3 percent increase in July.

Economists had expected retail sales to increase by 0.6 percent after sales in the previous month were originally reported as virtually unchanged. Excluding a jump in auto sales, retail sales still rose by 0.3 percent n August, matching economist estimates as well as the upwardly revised increase in the previous month.

Reflecting a steep drop in prices for imported fuel, the Labor Department released a report on Friday showing a notable decrease in U.S. import prices in the month of August. The report said import prices fell by 0.9 percent in August following a revised 0.3 percent drop in July. Economists had expected import prices to decrease by about 1.0 percent.

Additionally, the Labor Department said export prices slid by 0.5 percent in August after inching up by a revised 0.1 percent in the previous month. Export prices were expected to dip by 0.2 percent.

Reuters and the University of Michigan are scheduled to release the results of their preliminary consumer sentiment survey at 9:55 am ET. The consumer sentiment index is expected to increase to 83.4 in September from 82.5 in August.

The Commerce Department will also release its business inventories report for July at 10 am ET. Economists expect a 0.4 percent month-over-month increase in business inventories.

Business inventories rose 0.4 percent month-over-month and 5.8 percent year-over-year in June. At the same time, business sales rose 0.3 percent compared to the previous month and were 4.7 percent higher than a year ago. The business inventories to sales ratio was at 1.29 compared to 1.28 in June 2013.

Stocks in Focus

Hewlett-Packard (HPQ) announced a deal to buy cloud software maker Eucalyptus.

Alliance Data (ADS) said it has agreed to buy Conversant (CNVR), a digital marketing company, for $2.3 billion or $35 per share in cash and stock.

Equifax (EFX) said its board has approved a $400 million stock buyback program.