MW: U.S. stock futures weaker after strong week of gains
U.S. stock futures pointed to a weaker start Friday after a week in which equities have already stormed 8% higher amid hopes the economy has begun to stabilize, though a warning from Accenture was a reminder of the tough times in the corporate world.
S&P 500 futures slipped 5 points to 822.30 and Nasdaq 100 futures fell 6.5 points to 1,266.50. Dow industrial futures dropped 49 points.
U.S. stocks rallied on Thursday, helped by guidance provided by Best Buy and ConAgra and hopes for cyclical plays like Research In Motion. The Nasdaq Composite turned positive for the year with a 3.8% rise. The Dow Jones Industrial Average added 174 points and the S&P 500 rose nearly 19 points.
Rob Carnell, an economist at ING in London, isn't a believer in the notion that economy has stabilized. He said Thursday's data showing rising jobless claims and a fall in non-financial corporate profits in the fourth quarter put the U.S. economy back into a proper perspective.
"Trailing EPS tends not to turn until the total profits figures derived from GDP have turned. And they have not," he said.
Attention on Friday turns to the release of February's figures on personal income and the Fed's favored inflation gauge, the PCE core deflator.
A second reading of the University of Michigan's consumer confidence gauge for March also is due for release.
In currency markets, the dollar rose vs. the euro but fell against the Japanese yen, frequently a sign of diminishing risk appetite.
Commodity futures were also in reverse, with gold futures dropping $10.50 an ounce and oil futures down over $1 a barrel.
"We think precious metals prices are still at risk as today's update on CFTC data is likely to show that speculative positioning still looks stretched," said analysts at Credit Suisse.
The banking sector also will be in the spotlight as President Obama meets with the head of several lenders, including Bank of America J.P. Morgan Chase Citigroup and Goldman Sachs Also in the banking sector, Barclays rose 6.5% in London after the Financial Times reported that a stress test will conclude the lender doesn't need to raise fresh capital.
Builder KB Home is due to report results, with investors focusing on orders after KB Home's aggressive price cuts.
Accenture dropped 9% after it lowered its financial outlook.
U.S.-listed Chinese solar stocks will be in focus after Thursday's rally on the back of an outline for possible Chinese subsidies. "The reality is that with or without this program in China the solar market remains challenging, with falling average selling prices, negative revenue growth and a likely year-on-year decline in total shipments," said analysts at Collins Stewart.
In Asia, the Nikkei 225 slipped 0.1% in Tokyo, the Kospi slipped 0.5% in Seoul while the Hang Seng rose 0.3% in Hong Kong.
Europe stocks also saw languid performances, with the FTSE 100 up fractionally and the German DAX 30 down 0.6%.
