U.S. Stocks May Give Back Ground Following Yesterday’s Rally

Following the rally seen in the previous session, stocks may give back ground in early trading on Friday. The major index futures are currently pointing to a slightly lower open for the markets, with the S&P 500 futures down by 0.1 percent.

Traders may look to cash in on yesterday’s surge, which saw the S&P 500 end the day just shy of its record closing high.

Concerns about the strength on the economy may also weigh on Wall Street after the Commerce Department released a report showing retail sales in the U.S. fell by much more than expected in the month of January.

The report said retail sales slid by 0.9 percent in January after climbing by an upwardly revised 0.7 percent in December.

Economists had expected retail sales to edge down by 0.1 percent compared to the 0.4 percent increase originally reported for the previous month.

Excluding a 2.8 percent plunge in sales by motor vehicle and parts dealers, retail sales declined by 0.4 percent in January after advancing by an upwardly revised 0.7 percent in December.

The pullback surprised economists, who had expected ex-auto sales to rise by 0.3 percent compared to the 0.4 percent growth originally reported for the previous month.

While the data may raise some economic worries, it could also lead to renewed optimism about the outlook for interest rates following the release of hotter than expected inflation data earlier in the week.

Shortly before the start of trading, the Federal Reserve is scheduled to release its report on industrial production in the month of January. Industrial production is expected to rise by 0.3 percent in January after jumping by 0.9 percent in December.

Stocks moved sharply higher over the course of the trading day on Thursday, extending the significant recovery from the sell-off seen early in Wednesday’s session. The major averages all showed strong moves to the upside, with the tech-heavy Nasdaq leading the charge.

The major averages saw continued strength going into the close, ending the day near their high of the session. The Nasdaq surged 295.69 points or 1.5 percent to 19,945.64, the S&P 500 jumped 63.10 points or 1.0 percent to 6,115.07 and the Dow advanced 342.87 points or 0.8 percent at 44,711.43.

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher on Friday. Hong Kong’s Hang Seng Index spiked by 3.7 percent and China’s Shanghai Composite Index rose by 0.4 percent, although Japan’s Nikkei 225 Index bucked the uptrend and slid by 0.8 percent.

Meanwhile, the major European markets are turning in a mixed performance on the day. While the French CAC 40 Index is up by 0.4 percent, the U.K.’s FTSE 100 Index is down by 0.3 percent and the German DAX Index is down by 0.4 percent.

In commodities trading, crude oil futures are rising $0.54 to $71.83 a barrel after edging down $0.08 to $71.29 a barrel on Thursday. Meanwhile, after climbing $16.70 to $2,945.40 an ounce in the previous session, gold futures are inching up $8.10 to $2,953.50 an ounce.

On the currency front, the U.S. dollar is trading at 152.13 yen versus the 152.80 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.0495 compared to yesterday’s $1.0465.

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