Stocks could finish April on an upswing, riding the tail winds from another morning of earnings news.
Stocks are up about 2 percent for the week, on the strong performance of corporate earnings and a push from the Fed Wednesday, which reaffirmed it would keep rates low for some time to come. The market was not even held back Thursday by a third disappointing weekly jobless claims report, at 429,000. Pending home sales, however, were better than expected, up 5.1 percent for March.
Friday's data includes personal income and spending data, core PCE prices and the first quarter employment cost index, released at 8:30 a.m. Chicago purchasing managers data is reported at 9:45 a.m., and consumer sentiment is at 9:55 a.m.
Caterpillar , Chevron and Merck are among the companies reporting earnings ahead of the opening bell. Research in Motion shares should also be active, after taking a dive late Thursday on a company forecast for weaker earnings and revenues.
RIM said it sees first quarter revenue slightly below its previous guidance of between $5.2 and $5.6 billion and blamed weak shipments of its BlackBerry phones as consumers move toward cheaper handsets. But it is also being squeezed at the high end of the price spectrum by Apple's i-Phone.
So far, 291 of the S&P 500 companies have reported, and according to Thomson Reuters, 74 percent have beaten earnings estimates. Seventy percent have beaten revenue estimates.
"All of these earnings have been coming through pretty respectable, and you have a lot of merger activity," said Steve Massocca of Wedbush Securities. On Thursday, Exelon said would buy Constellation Energy for $7.9 billion, creating one of the country's largest power companies. After the bell, Total SA said it would buy a stake in Sun Power for $1.37 billion.
"We've broken out to new highs. You've got to think we keep going for awhile..'be long or be wrong.' We still have very accommodative monetary policy, and it doesn't appear to be changing any time soon....I can lend my money to the federal government for 3 percent for 10 years, or I could buy stocks, and people are deciding to buy stocks," he said.
Investors are also deciding to buy oil, gold and silver, especially silver. The metal closed in on its all time high Thursday, gaining 3.4 percent at $47.52, just shy of its 31-year high. Oil rose slightly to $112.86 a barrel, the highest closing level since Sept. 22, 2008. Gold rose nearly a percent to $1530.80, another record. The dollar, meanwhile, continued its decline, and the euro gained slightly to finish at 1.4821.
"No end to the Fed's current policy is in sight, which will keep the dollar's trend intact. Other forces are doing it too, including the desire by central banks to diversify their reserve assets, and the low relative growth expected in he U.S. compared to developing markets," wrote Pimco strategist Tony Crescenzi in a quick note this week.
Crescenzi also explained recently that the dollar's decline is an eight-year trend, and it is not problematic unless it becomes disorderly. "As long as it's not rapid and disorderly, it is unlikely to be disruptive to the U.S. economy or the U.S. financial markets," said Crescenzi. Eight years ago, the dollar was 70 percent of the world's reserve assets but it now is 62 percent, he added.
Fed Chairman Ben Bernanke speaks Friday at 12:30 p.m. on the topic of community development at a Fed community affairs research conference in Arlington, Va.
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