News Column

MARKET COMMENT: Wall Street Looks For Home Sales Rebound

May 23, 2014

Jon Darby

LONDON (Alliance News) - US stocks are looking set to open fractionally higher Friday as investors look for a rebound in new home sales data still to come.

The futures market indicates that stocks on Wall Street will continue to perform a little better than the FTSE 100 has done this week. Over the week so far, the UK's leading index has dropped about 0.8%, while the DJIA has gained 0.3% up to Thursday's close and the S&P 500 has gained more than 1.0%. Ranges have remained fairly tight all around, however, with investors lacking a reason to push stocks past recent all-time highs.

Following the modest gains made on Thursday, the US futures markets indicate that stocks will attempt to push higher again, with the DJIA, the S&P 500, and the Nasdaq Composite all set to open slightly firmer.

The Nasdaq Composite posted the best US gains on Thursday, rising 0.6%, boosted in part by newly listed The second-largest Chinese e-commerce company after Alibaba rose 10% in its first day of trading. "The next test for the company will be how well it survives in a day that sees a tech sell-off," said CMC Markets market analyst Jasper Lawler.

US shoe retailer Foot Locker has bucked the US retail trend by posting first-quarter results ahead of expectations Friday. The company delivered earnings per share of USD1.11, beating expectations for USD1.06.

The US economic calendar is light Friday, with just new home sales data to come at 1500 BST. The consensus expectation is for 425,000 new home to have been sold in April, which would be an improvement from the 384,000 sold in March, when the figure dropped by 14.5%.

"April US new home sales should more than recoup the inexplicable March decline of 14.5% month-on-month," said Societe General in note to clients. The bank is looking for a particularly strong rise of 19.8% in April.

The dollar has gained a little ground across the board ahead of the US data and also as elections to the European Parliament get underway. Analysts suggest that major gains by anti-EU parties are likely, as unemployment and sluggish growth in the region has caused anger among voters.

Currently the pound trades at a near session low of USD1.6835, and the euro trades at USD1.3625.

That protest vote is also in evidence in the UK Friday, where euro-sceptic party UKIP appears to be making strong gains in local elections. If next year's general election results turn out to be a reflection of the current vote, the UK is heading for a second consecutive hung Parliament, analysts say.

Heading into the US market open, the FTSE 100 is down 0.2% at 6,808.31, the FTSE 250 is flat at 15,675.78, and the AIM All-Share is up 0.1% at 797.75.

For more stories on investments and markets, please see HispanicBusiness' Finance Channel

Source: Alliance News