Stocks May Experience Choppy Trading Following Recent Drop - U.S. Commentary

(RTTNews) - After moving lower over the three previous sessions, stocks may turn in a lackluster performance in early trading on Friday. The major index futures are currently pointing to a roughly flat open for the markets, with the Dow futures down by just 6 points.

The lack of momentum for the markets comes following the release of mixed earnings news as well as some disappointing Chinese manufacturing data.

Shares of Amazon (AMZN) are likely to open sharply higher after the online retailer reported an unexpected second quarter profit. The company also provided upbeat guidance for the third quarter.

Coffee chain Starbucks (SBUX) is also moving notably higher in pre-market trading after reporting slightly better than expected third quarter results and authorizing the repurchase of an additional 50 million shares.

On the other hand, shares of Biogen (BIIB) may come under pressure after the biotechnology company reported weaker than expected second quarter revenues and cut its full-year guidance.

Travel website operator TripAdvisor (TRIP) is also falling sharply in pre-market trading after reporting second quarter results that came in below analyst estimates.

Traders are also digesting the results of a survey by Markit and Caixin showing that Chinese manufacturing activity fell to a fifteen-month low in July.

The index of Chinese manufacturing activity slid to 48.2 in July from 49.4 in June, while economists expected a reading of 49.7. A reading below 50 indicates a contraction in activity.

Julian Evans-Pritchard, China Economist at Capital Economics, said, "Today's PMI reading suggests that recent improvements in economic momentum may have been derailed this month by weaker foreign demand."

On the U.S. economic front, the Commerce Department is scheduled to release its report on new home sales in the month of June at 10 am ET.

Economists expect new home sales to edge up to an annual rate of 550,000 in June after climbing to a seven-year high of 546,000 in May.

Stocks came under pressure over the course of the trading day on Thursday after initially showing a lack of direction. With the notable pullback on the day, the major averages closed lower for the third consecutive session.

The major averages climbed off their worst levels going into the close but remained firmly negative. The Dow fell 119.09 points or 0.7 percent to 17,731.95, the Nasdaq slid 25.36 points or 0.5 percent to 5,146.41 and the S&P 500 dropped 12.00 points or 0.6 percent to 2,102.15.

In overseas trading, stock markets across the Asia-Pacific region moved the downside during trading on Friday. Japan's Nikkei 225 Index slumped by 0.7 percent, while Hong Kong's Hang Seng Index tumbled by 1.1 percent.

Meanwhile, the major European markets are turning in a mixed performance on the day. While the German DAX Index has edged down by 0.2 percent, the U.K.'s FTSE 100 Index is up by 0.1 percent and the French CAC 40 Index is up by 0.4 percent.

In commodities trading, crude oil futures are climbing $0.46 to $48.91 a barrel after sliding $0.74 to $48.45 a barrel on Thursday. Meanwhile, an ounce of gold is currently trading $1,081.90, down $12.20 from the previous session's close of $1,094.10. On Thursday, gold rose $2.60.

On the currency front, the U.S. dollar is trading at 123.95 yen compared to the 123.93 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.0949 compared to yesterday's $1.0984.