Strong Job Gains Could Reignite Rate Worries

(RTTNews) - Lord, God be with me this day

The major U.S. index futures are pointing to a lower opening on Friday, with sentiment suggesting that the mood has turned apprehensive in the wake of the release of a report that showed that the U.S. economy added more jobs than had been anticipated. The solid job gains could stir anxiety concerning monetary policy normalization notwithstanding the data vouching for the economy's strength.

U.S. stocks advanced solidly for a second consecutive session on Thursday, as optimism concerning efforts to preserve the global economic momentum encouraged traders. The major averages opened higher and advanced steadily in early trading before moving roughly sideways for the rest of the session.

The Dow Industrials ended up 323.35 points or 1.84 percent at 17,908, the S&P 500 Index closed 36.24 points or 1.79 percent higher at 2,062 and the Nasdaq Composite Index ended at 4,736, up 85.72 points or 1.84 percent.

All thirty of the Dow components closed higher, with UnitedHealth (UNH), DuPont (DD) and Microsoft (MSFT) leading the gains.

Transportation, biotechnology, basic material, energy, retail, housing, semiconductor, computer hardware and financial stocks all advanced in the session.

On the economic front, the Labor Department reported that jobless claims fell by 4,000 to 294,000 in the week ended January 3rd. Economists expected claims to have declined to 290,000. The four-week average also edged down to 290,500 from 290,750. Meanwhile, continuing claims calculated with a week's lag rose by 101,000 to 2.9452 million in the week ended December 27th.

The Federal Reserve's consumer credit report showed a $14.1 billion increase in outstanding consumer credit for November, less than the $15 billion increase expected by economists. Non-revolving credit surged up by $15 billion, while revolving credit tied to credit cards eased $0.9 billion.

Currency, Commodity Markets

Crude oil futures are slipping $0.25 to $48.54 a barrel after inching up $0.14 to $48.79 a barrel on Thursday. Gold futures, which fell $2.20 to $1,208.50 an ounce in the previous session, are currently adding $5.80 to $1,214.30 an ounce.

Among currencies, the U.S. dollar is trading at 119.54 yen compared to the 119.66 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.1786 compared to yesterday's $1.1793.

Asia

Most Asian markets advanced, encouraged by the positive performance on Wall Street overnight and easing concerns that global growth will be derailed by the encircling macroeconomic risks.

The Japanese market was held afloat despite a modest advance by the yen. The Nikkei 225 average opened higher and held above the unchanged line in the morning before giving back its gains in late trading. Amid some volatility, the index still had momentum to end up 30.63 points or 0.18 percent at 17,198.

Telecom, pharma, insurance, utility, energy, retail and construction stocks ended higher for the session, while export stocks were mostly lower.

Australia's All Ordinaries hovered above the unchanged line throughout the session before ending 80.70 points or 1.51 percent higher at 5,440. The market witnessed a broad based rally, with energy, material, IT and consumer staple stocks leading the way higher.

Hong Kong's Hang Seng Index ended at 23,920, up 84.42 points or 0.35 percent, while China's Shanghai Composite Index ended down 8.04 points or 0.24 percent at 3,285.

On the economic front, a report released by the Australian Bureau of Statistics showed that retail sales in Australia rose 0.1 percent month-over-month in November. This was less than the 0.2 percent increase expected by economists.

A separate report released by the Australian Industry Group showed that the Australian construction sector contracted further in December. The construction purchasing managers' index fell to 44.4 in December from 45.4 in November.

Meanwhile, a report released by China's National Bureau of Statistics showed that consumer prices in China rose 1.5 percent year-over-year in December following a 1.4 percent increase in November. The increase was in line with estimates. On the other hand, producer prices fell 3.3 percent year-over-year, faster than the 2.7 percent drop in November.

Japan's Cabinet Office reported that a leading economic indicators index for Japan fell to the lowest level since January 2013. According to preliminary figures, the index fell to 103.8 in November from 104.5 in October.

Europe

After advancing for two straight sessions, European stocks opened lower amid the release of some lackluster domestic data.

In corporate news, France's Sodexo reported higher first quarter sales, helped by a strong showing in the U.S. and a favorable currency impact. The company also confirmed its full year guidance. BMW announced that it has sold more than 2 million vehicles in 2014.

On the economic front, the German Federal Statistical Office reported that exports fell 2.1 percent month-over-month in November, steeper than the 0.5 percent drop in October and the 1 percent fall expected by economists. Imports climbed 1.5 percent.

Consequently, the German trade surplus declined to 17.7 billion euros from 20.8 billion euros in October.

A separate report showed that German industrial production fell 0.1 percent month-over-month in November, dragged down by energy output. Excluding energy and construction output, industrial production was up 0.3 percent.

Meanwhile, data released by French statistical office INSEE showed an unexpected drop in industrial production for November and a narrower than expected trade deficit for November.

U.S. Economic Reports

The Labor Department reported that non-farm payrolls expanded by 252,000 in December compared to expectations for a gain of 245,000 jobs. The previous two months' job gains were upwardly revised by a collective 50,000.

The unemployment rate declined by 0.2 percentage points to 5.6 percent

The Commerce Department is due to release its wholesale inventories report for November at 10 am ET. The consensus estimate calls for a 0.3 percent month-over-month increase in wholesale inventories for the month.

Wholesale inventories at the end of October were up 0.4 percent month-over-month and 6.8 percent annually. At the same time, wholesale sales rose 0.2 percent month-over-month and were 4.3 percent higher than a year-ago. The inventories to sales ratio was at 1.19 compared to 1.16 in the year-ago period.

Richmond Federal Reserve Bank President Jeffrey Lacker is due to speak on the economic outlook in Richmond at 1:20 pm ET.

Stocks in Focus

DuPont (DD) appealed to its shareholders not to take any action in response to Trian Fund Management's announcement that it intends to nominate four individuals for election to the company's board. After reviewing Trian's proposed nominees, the company said it would present its recommended slate of director nominees in its proxy statement.

Bed Bath & Beyond (BBBY) reported third quarter earnings of $1.23 per share, including a 4 cents per share benefit, on sales of $2.943 billion, up 2.7 percent year-over-year. The earnings exceeded estimates, while the revenues were shy of estimates. The company also said it now expects earnings of $1.78-$1.83 per share for the fourth quarter and $5.05-$5.09 per share for the full year. The guidance was fairly positive.

VOXX International (VOXX) reported third quarter earnings of 64 cents per share on net sales of $223.4 million. The earnings exceeded estimates, while the revenues were shy of expectations.

Macy's (M) reported comparable store sales growth of 2.7 percent year-over-year for the two month period ended in December, coming in within the 2-3 percent growth guidance it had offered for its fourth quarter. The company narrowed its comparable store sales growth guidance to 2.5-3 percent and maintained its full year earnings guidance at $4.25-$4.35 per share. Separately, the company also announced a series of measures, including restructuring of merchandising and marketing functions at its namesake and Bloomingdale's stores.

Gap (GPS) reported net sales growth of 4 percent and comparable store sales growth of 3 percent for the November and December holiday shopping season.

AngioDynamics (ANGO) reported better than expected second quarter results, but its third quarter and full year guidance was lukewarm.

Helen of Troy (HELE) reported better than expected third quarter results and raised its guidance for 2015.

Ruby Tuesday (RT) reported a loss for its second quarter that was in line with expectations. The company's revenues missed estimates and it lowered its same-restaurant sales growth guidance for the full year.