Stocks May Extend Yesterday's Sell-Off In Early Trading - U.S. Commentary

(RTTNews) - After moving sharply lower over the course of the previous session, stocks are likely to see some further downside in early trading on Friday. The major index futures are currently pointing to a notably lower open for the markets, with the Dow futures down by 77 points.

A negative reaction to quarterly results from JP Morgan (JPM) is likely to weigh on the markets, with the financial giant falling by 3.8 percent in pre-market trading.

The pullback by JP Morgan comes after the company reported first quarter earnings that fell year-over-year and came in below analyst estimates. The company also reported weaker than expected revenues for the quarter.

The disappointing results from JP Morgan have added to concerns about the impending earnings season, which will really start to pick up steam next week.

On the other hand, mortgage giant Wells Fargo (WFC) recently reported stronger than expected first quarter earnings growth on slightly better than expected revenues.

The downward momentum on Wall Street also reflects the negative sentiment generated by yesterday's sell-off, which was partly attributed to concerns about the valuation of momentum stocks.

Meanwhile, traders have largely shrugged off a report from the Labor Department showing that U.S. producer prices rose by much more than expected in the month of March.

The Labor Department said its producer price index for final demand advanced by 0.5 percent in March after edging down by 0.1 percent in February. Economists had been expecting the index to tick up by 0.1 percent.

Core producer prices, which exclude food and energy, also rose by 0.6 percent in March following a 0.2 percent drop in the previous month. Core prices had been expected to rise by 0.2 percent.

Not long after the open, Reuters and the University of Michigan are scheduled to release their preliminary report on consumer sentiment in the month of April. The consumer sentiment index is expected to creep up to 81.0 in April from 80.0 in March.

Stocks showed a substantial move to the downside during trading on Thursday, more than offsetting the gains posted in the two previous sessions. Technology stocks helped to lead the sell-off, contributing to a particularly sharp drop by the tech-heavy Nasdaq.

The Nasdaq turned in its worst performance since November of 2011, plunging 129.73 points or 3.1 percent to a two-month closing low of 4,054.11. The Dow tumbled 266.96 points or 1.6 percent to 16,170.22 and the S&P 500 plummeted 39.10 points or 2.1 percent to 1,833.08.

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower on Friday following the overnight sell-off on Wall Street. Japan's Nikkei 225 Index plunged by 2.4 percent, while Hong Kong's Hang Seng Index slumped by 0.8 percent.

The major European markets have also come under pressure on the day. While the German DAX Index has tumbled by 1.8 percent, the French CAC 40 Index and the U.K.'s FTSE 100 Index are down by 1.4 percent and 1.3 percent, respectively.

In commodities trading, crude oil futures are sliding $0.13 to $103.27 a barrel after dipping $0.20 to $103.40 a barrel on Thursday. Gold futures are edging down $0.40 to $1,320.10 an ounce. In the previous session, gold rose $14.60 to $1,320.50 an ounce.

Among currencies, the U.S. dollar is trading at 101.44 yen compared to the 101.53 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.3867 compared to yesterday's $1.3886.