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Stock futures mildly higher after US strike in Iraq

U.S. stock-index futures remained mildly higher after the U.S. military conducted an airstrike on Islamic insurgents in Iraq, with geopolitical concerns overtaking economic reports.

The Pentagon's press secretary said via Twitter on Friday that US military aircraft had struck rebel artillery that was being used against Kurdish forces defending a position near American personnel.

"Does that speak to an escalation of tension, or a resolution in that geopolitical hot spot; there's an argument to be made for the latter," Art Hogan, chief market strategist at Wunderlich Securities, said of the strike in Iraq.

Futures had risen earlier on a news report signaling Russia might be looking to de-escalate the Ukraine conflict, offsetting declines that came with President Barack Obama's decision to authorize airstrikes in Iraq.

Stock-index futures added to their gains after a report from the Labor Department had nonfarm productivity rebounding more strongly than expected in the second quarter; yet a sharp drop in labor costs pointed to still-tame wage pressure.

Thursday evening, Obama told a press conference he had authorized the U.S. military to make targeted airstrikes to protect American personnel in Iraq. His remarks came as the U.S. began an effort to drop humanitarian aid to Iraqi civilians in the northwest of the country.

The decision roiled global markets, which were already under pressure because of growing tensions between Russia and Ukraine. In early Friday trading, Treasury bonds and gold surged as traders sought out safe-havens.

"Any signs that the U.S. is going to have to support the Iraqi military and security forces against the rise of ISIS will fuel market suspicion of another U.S.-led offense in the country," Evan Lucas, a market strategist at brokerage IG, said in a morning note.

He said that if the U.S. was to re-enter Iraq, than the price of Brent crude oil could creep up to $110 per barrel.

"Short-term volatility has come alive today," said Chris Weston, chief market strategist at IG, in a note on Friday.

"I would personally hold off from accumulating just yet until clarity is restored, although those who subscribe to the mantra 'buy when fear is high' would look at this market with great interest."

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Traders have also cited concerns over the raising of interest rates by the U.S. Federal Reserve with the central bank set to give more details on its strategy in the next few months.

China reported a 14.5 percent surge in July exports on Friday, blowing past expectations for a 7.5 percent rise. Its trade surplus rose to $47.3 billion, compared to forecasts for $27 billion.

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