WORLD MARKET UPDATE

US Market

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The major U.S. index futures are pointing to a higher opening on Friday, with futures trimming their early gains following the release of the New York region manufacturing activity data that showed a less than expected rebound in activity. The dollar is firmer and crude oil prices are moderately lower. The markets may also focus on the industrial production and consumer sentiment data even as growth fears may be triggered by the weak manufacturing activity data released short while ago. U.S. stocks rallied strongly on Thursday, benefiting from positive jobless claims data and a retreat in bond yields. The major averages opened higher and were steady in early trading. Thereafter, the averages moved steadily higher before ending notably higher. The Dow Industrials ended up 191.75 points or 1.06 percent at 18,252, the S&P 500 Index closed 22.62 points or 1.08 percent higher at 2,121, a fresh closing high, and the Nasdaq Composite ended at 5,051, up 69.10 points or 1.39 percent. Twenty-nine of the thirty Dow components advanced in the session, led by UnitedHealth (UNH), Visa (V),Microsoft (MSFT), Boeing (BA) and Apple (AAPL). On the other hand, Cisco Systems (CSCO) slid 1.02 percent despite reporting forecast-beating results. Among the sectors, airline, biotechnology, utility, basic material, housing, computer hardware and semiconductor stocks were among the best performers of the session, while oil service stocks retreated. On the economic front, the Labor Department reported that jobless claims unexpectedly fell to 264,000 in the week ended May 9th from 265,000 in the previous week. The four-week average slipped to 271,750 from 279,500. Continuing claims calculated with a week's lag were unchanged at a 15-year low of 2.229 million in the week ended May 2nd. A separate report released by the Labor Department showed that producer prices for final demand unexpectedly declined by 0.4 percent month-over-month in April, rendering the annual rate to a negative 1.3 percent. Core producer prices were down 0.2 percent, belying expectations for a 0.1 percent increase. The annual rate of core producer price inflation slowed to 0.8 percent from 0.9 percent.

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US Economic Reports

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A report released by the New York Federal Reserve showed that manufacturing activity moved into expansion territory. The general business conditions index came in at a less than expected 3.09 in May. Economists had expected the general business conditions index to rise to 5 in May from -1.19 in April. The new orders index came in at 3.85 and the shipments index was at 14.96, while the order backlogs index fell to -11.46. The Federal Reserve is due to release its industrial production report for April at 9:15 am ET. The consensus estimate calls for unchanged industrial production, while capacity utilization is expected to remain unchanged at 78.4 percent. Industrial production fell 0.6 percent month-over-month in March, worse than the 0.3 percent drop expected by economists. Utility output slumped 5.9 percent and was responsible for much of the weakness in the headline number. Mining output also declined, while manufacturing output was up 0.1 percent, as motor vehicles/parts production climbed 3.2 percent. Production of machinery and computer/electronics was flat. The University of Michigan will release its preliminary U.S. consumer sentiment index for May at 10 am ET. Economists expect the index to slip to 95.8 from 95.9 in April.

Stocks in Focus

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Applied Materials (AMAT) reported better than expected second quarter results and issued in line guidance for the third quarter. Symantec's (SYMC) fourth quarter results trailed expectations and issued weak earnings and revenue guidance for fiscal year 2016. Nordstrom (JWN) reported below-consensus earnings for its first quarter, while its revenues exceeded estimates. The company's earnings guidance for 2015 was lackluster. SINA (SINA) reported first quarter adjusted earnings and revenues that beat estimates. Microblogging site Weibo (WB), a spin-off from SINA, reported in line first quarter results and its revenues exceeded estimates. The company's second quarter revenue guidance was weak. Dillard's (DDS) reported below-consensus earnings and revenues for its first quarter, with comparable store sales for the quarter declining 1 percent. Netflix (NFLX) may be in focus after a Bloomberg report suggested that it is in talks with a Chinese media company backed by Alibaba's (BABA) Jack Ma to enter into China's online video market. Mosaic (MOS) announced that its board approved a $1.5 billion stock buyback authorization and also an increase in its quarterly dividend to $0.275 per share from the current $0.25 per share. Avon reported that it has not received any offer or other communication from PTG Capital Partners and has not been able to confirm that such an entity exists. Earlier, a regulatory filing showed that PTG Capital Partners has proposed to acquire Avon at $18.75 per share.

European Markets

With U.S. rate hike fears receding and Greek debt concerns easing, European stocks opened higher and saw further upside since then. However, following the release of the U.S. regional manufacturing activity data, the averages have trimmed their gains. Comments from European Central Bank president Mario Draghi that the central bank will not premature withdraw its quantitative easing measures could also encourage traders. In corporate news, Hennez & Mauritz reported 10 percent year-over-year growth in its group sales, including VAT, in April. U.K.'s Bovis Homes said it is on track to deliver on its growth expectations for 2015. The company also said it has traded well to-date in 2015. On the economic front, a report released by the U.K. Office for National Statistics showed that construction output rose 3.9 percent month-over-month in March, although it declined 1.1 percent in the fourth quarter. Annually, construction output was up 1.6 percent.

Asian markets

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The Asian markets ended mostly higher, led by the Hong Kong, Japanese and Australian market, even as the Chinese market succumbed to selling pressure. The South Korean and Taiwanese markets also retreated. The positive close on Wall Street overnight encouraged traders to invest in stocks. The Japanese market took advantage of a subdued yen. The Japan's Nikkei 225 opened higher and rose sharply in early trading. After giving back some of the gains over the course of the morning, the index rose steadily before ending up 162.68 points or 0.83 percent at 19,733. Dentsu rallied close to 14 percent on the announcement of stock buyback and an increase in dividend. Financial, telecom, utility, pharma, real estate, food and retail stocks also gained ground. Export stocks saw mixed sentiment. Australia's All Ordinaries hovered in positive territory throughout the session before ending up 37.50 points or 0.66 percent at 5,730. The market witnessed broad based strength, with consumer, healthcare, industrial, material, real estate and utility stocks seeing strong gains. On the other hand, the pullback in oil prices weighed down on the energy space. Hong Kong's Hang Seng Index ended at 27,775, up 488.07 points or 1.79 percent, while China's Shanghai Composite Index slipped 69.62 points or 1.52 percent before ending at 5,730. On the economic front, a report released by the Bank of Japan showed that domestic corporate goods price index edged up 0.1 percent month-over-month in April, in line with expectations. In March, the index was up 0.3 percent. Annually, prices fell 2.1 percent. Confidence among consumers in Japan unexpectedly fell in April, according to the results of a survey by the Cabinet Office. The consumer confidence index eased 0.2 points to 41.5 in April, while economists had expected an increase to 41.8. Foreign direct investment in China increased at a faster than expected pace in April, the Ministry ofCommerce reported. FDI increased 10.5 percent year-over-year in April to $9.6 billion. Economists had forecast the growth rate to slow to 2 percent from the 2.2 percent reported in March.

Currency and Commodities Markets

Crude oil futures are slipping $0.66 to $59.22 a barrel after declining $0.62 to $59.88 a barrel on Thursday. An ounce of gold is trading at $1,216.70, down $8.50 from the previous session's close of $1,225.20. On Thursday, gold rose $7. On the currency front, the U.S. dollar is trading at 119.35 yen compared to the 119.18 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.1410 compared to yesterday's $1.1410. COURTESY:

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