Futures Hold Gains After Inflation News
US stock index futures pointed to a higher open on Wall Street Friday despite a downgrade by Fitch Ratings of Goldman Sachs, Bank of America and five other large banks based in Europe and the US, citing "increased challenges" in the financial markets.
Markets reacted little to economic data showing that consumer prices were flat in November as a drop in energy prices offset increases in other areas. Economists expected a 0.1 percent increase. The bad news was that consumers continued to fall behind as real weekly wages dropped 0.1 percent for the month.
Better than expected economic data published on Thursday gave investors some tentative hopes of an economic recovery.
The improved economic picture generated skepticism, though, with some economists pointing out that the data gains could have been the result of deceptive seasonal adjustments. Others noted that the market has been drifting around on low volume and a Standard & Poor's 500 with just 42 percent of its companies trading above their 50-day moving averages.
"We’re also in a pattern right now of opening at the highs of the day for the indices, which is tough for traders and investors to handle," said Paul Hickey at Bespoke Investment Group. "Until we see some reversal of this trend, we’re not doing any buying."
In other news U.S. lawmakers reached a tentative deal to fund an array of government agencies through December 30 and avert shutting down many of Washington's operations starting this weekend.
Research In Motion posted a sharp drop in profit on Thursday, offered a dismal outlook for BlackBerry shipments around Christmas and delayed the likely arrival of a make-or-break overhaul of its smartphones, sending its shares tumbling.
Analysts converged on the company, offering a slew of downgrades and harsh criticisms of the company's attempts to expand market share. Deutsche Bank, for one, cut its price target to $10. RIM shares fell more than 10 percent in premarket trading.
Traders also will be watching Zynga after the social gaming company's initial public offering priced at $10 a share. Trading is expected to open at 11 am.
Private equity firm Apollo Global Management said its affiliates would buy Belgian chemicals company Taminco for around 1.1 billion euros ($1.4 billion) from CVC Capital Partners.
Shares in Adobe Systems were up 6.8 percent after the bell on Thursday as the company reported results.
Cameron International said BP had agreed to indemnify the company for current and future compensatory claims associated with the Deepwater Horizon incident.
U.S. insurance broker Brown & Brown said it had agreed to buy Arrowhead General Insurance Agency for $395 million in cash.
Delta Petroleum filed for Chapter 11 bankruptcy protection early on Friday, a month after the U.S. oil and gas producer warned about its liquidity issues.
United Technologies said it expected to increase profits by 6 to 10 percent in 2012, despite a slowing U.S. recovery and what it expects to be a prolonged slump in Europe.
Deutsche Boerse and NYSE Euronext have stepped up their lobbying with an advertising campaign to pressure EU regulators and secure approval for their $9 billion merger.
European stocks rose on Friday, extending the previous session's tentative rebound from a week-long drop, helped by better-than-feared U.S. macro data, but lingering concerns over the euro zone debt crisis kept gains in check.
The yuan jumped to a record high on Friday against the dollar on suspected intervention orchestrated by the central bank, its most explicit action in three months to deter speculators from betting on a fall in the currency.