US futures hold steady, with progress seen on political stalemate
U.S. stock index futures hovered around the flatline Friday, even though lawmakers appeared to be moving closer to resolving the deadlock in Washington.
Stocks logged their second-best gains this year on Thursday, with all three major averages soaring more than 2 percent and the Dow skyrocketing more than 300 points.
JPMorgan rose after the financial giant topped Wall Street expectations. But overall, the bank posted a quarterly loss due to legal expenses, but it expects those costs to eventually abate and normalize.
And Wells Fargo posted quarterly earnings that hit a record as loans and deposits surged during the period. Still, shares edged lower in pre-market trading.
In Washington, House Speaker John Boehner said Thursday that the Republican Party would offer a temporary increase to the debt ceiling in return for discussions with President Barack Obama on other budget and deficit issues. Obama said he was willing to consider the proposal, but insisted that lawmakers work to end the government shutdown as well.
(Read more: Boehner offers debt ceiling deal)
While the talks sent stocks soaring, some analysts remained skeptical. Bank of Tokyo-Mitsubishi's Derek Halpenny warned the relief rally might not last long.
"The deal is the bare minimum that was always likely, a deal to extend the debt ceiling for a mere six weeks — until November 22," Halpenny wrote in a research note. "The Republicans are also insisting that the Treasury can't then revert back to using extraordinary measures, meaning November 22 will be similar to the October 17 deadline. Limiting the flexibility of the Treasury to manage payments might be difficult for the White House to accept."
Talks continued into the night on Thursday and one senior Republican said an agreement could come on Friday, according to a report from Reuters.
Michael Hewson of CMC Markets described the dialogue between the two sides as progress.
"As we all know jaw-jaw is better than war-war," he said.
However, Hewson added: "Any agreement would not...repair the damage being done to the U.S. economy caused by the current shutdown, which makes yesterday's market rally somewhat irrational."
On the economic front, the Thomson Reuters/University of Michigan survey of consumer sentiment is scheduled to be reported at 9:55 am ET. Economists in a Reuters survey expect a reading of 76.0 compared with 77.5 in the final September report.
Producer price index, retail sales and business inventories have been postponed due to the ongoing government shutdown.
The Financial Times reported late on Thursday that Google funneled 8.8 billion euros ($12 billion) of royalty payments to Bermuda last year, a quarter more than in 2011, underlining the rapid expansion of a strategy that has saved the internet giant billions of dollars in tax.