U.S. Stocks May Give Back Ground Amid Negative Reaction To Bank Earnings

(RTTNews) - After moving sharply higher over the past several sessions, stocks may give back ground in early trading on Friday. The major index futures are currently pointing to a significantly lower open for the markets, with the S&P 500 futures down by 1.0 percent.

Traders may look to cash in on some of the recent strength in the markets amid a negative reaction to earnings news from several big-name financial companies.

Shares of JPMorgan Chase (JPM) are slumping by 2.4 percent in pre-market trading even though the company reported fourth quarter results that beat analyst estimates on both the top and bottom lines.

JPMorgan also announced an increase in reserves for credit losses, as the firm's macroeconomic outlook now reflects a "mild recession in the central case."

Financial giants Wells Fargo (WFC) and Bank of America (BAC) are also seeing notable pre-market weakness after reporting their fourth quarter results.

Negative sentiment may also be generated in reaction to a Labor Department report showing an unexpected increase in U.S. import prices in the month of December.

The Labor Department said import prices rose by 0.4 percent in December after falling by a revised 0.7 percent in November.

The rebound surprised economists, who had expected import prices to decrease by 0.8 percent compared to the 0.6 percent drop originally reported for the previous month.

Meanwhile, the report showed a much steeper than expected nosedive by export prices, which plunged by 2.6 percent in December after declining by a revised 0.4 percent in November.

Economists had expected export prices to decrease by 0.5 percent compared to the 0.3 percent dip originally reported for the previous month.

Shortly after the start of trading, the University of Michigan is scheduled to release its preliminary report on consumer sentiment in the month of January. The consumer sentiment index is expected to inch up to 60.5 in January from 59.7 in December.

The report includes reading on consumers' short-term and long-term inflation expectations that could impact the outlook for interest rates.

Stocks moved mostly higher over the course of the trading day on Thursday, extending the upward trend seen over the past several sessions. The major averages saw substantial volatility early in the session but climbed firmly into positive territory as the day progressed.

The major averages finished the day off their highs of the session but held on to gains. The Dow advanced 216.96 points or 0.6 percent to 34,189.97, the Nasdaq climbed 69.43 points or 0.6 percent to 11,001.10 and the S&P 500 rose 13.56 points or 0.3 percent to 3,983.17.

With the upward move, the Dow ended the session at its best closing level in over a month, while the Nasdaq and S&P 500 reached one-month closing highs.

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher on Friday, although Japan's Nikkei 225 Index bucked the uptrend and tumbled by 1.3 percent. China's Shanghai Composite Index and Hong Kong's Hang Seng Index both jumped by 1.0 percent.

The major European markets have also moved to the upside on the day. While the German DAX Index is just above the unchanged line, the French CAC 40 Index is up by 0.2 percent and the U.K.'s FTSE 100 Index is up by 0.4 percent.

In commodities trading, crude oil futures are inching up $0.15 to $78.54 a barrel after advancing $0.98 to $78.39 a barrel on Thursday. Meanwhile, after jumping $19.90 to $1,898.80 an ounce in the previous session, gold futures are edging up $1.50 to $1,900.30 an ounce.

On the currency front, the U.S. dollar is trading at 128.26 yen versus the 129.25 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.0807 compared to yesterday's $1.0853.