Futures lower on Portugal fears
Bank earnings will set the tone for US trading, as well as inflation and consumer sentiment data.
U.S. equity futures traded lower on renewed fears that Portugal could be the first nation to leave the eurozone after the recent political crisis has put in doubt the nation's attempts to meet its bailout goals. Meanwhile, key bank earnings before the bell should set the tone for U.S. trading.
Portugal's government requested to delay its latest bailout review in a sign that it has not made the required reforms to receive the next payment. Should the nation fail to do so, it could go bankrupt and leave the eurozone.
European Central Bank Chief Economist Peter Praet, formerly of the Bank of Belgium, was quoted overnight in German paper Handlesblatt as saying that interest rates in the eurozone will remain at current levels or lower as long as inflation remains moderate. This subtle hint is further clarity to the guidance President Mario Draghi gave last week in the that the market can now expect rate movements to be tied to medium-term inflation expectations.
S&P raised its outlook on Ireland overnight to positive from stable in a sign that the ratings agency could upgrade the rating of the bailed out nation from its current BBB+ to an A rating.
S&P 500 futures fell 1.1 points to 1,669.00.
The EUR/USD was lower at 1.3045.
Spanish 10-year government bond yields fell 2 basis points to 4.8%.
Italian 10-year government bond yields fell 2 basis points to 4.44%.
Gold fell 0.39% to $1,276.25 per ounce.
Asian shares were mixed overnight as Chinese and Hong Kong shares lagged after Chinese Finance Minister Lou said that growth would come in closer to 7% this year but would avoid a hard landing. The Japanese Nikkei 225 Index rose 0.23% and the Topix Index gained 0.6%. In Hong Kong, the Hang Seng Index dropped 0.75% while the Shanghai Composite Index slipped 1.62%. Also, the Korean Kospi fell 0.41% and Australian shares rose 0.16%.
European shares were mixed as peripheral indexes fell on Portuguese fears. The Spanish Ibex Index declined 0.93% and the Italian FTSE MIB Index fell 0.06%. Meanwhile, the German DAX rose 0.81% and the French CAC 40 Index rose 0.35% while U.K. shares gained 0.43%.
Commodities were lower overnight as the dollar retraced some losses. WTI crude futures fell 0.13% to $104.77 and Brent crude futures declined 0.09% to $107.63 per barrel. Copper futures rose 1.89% to $314.95 per pound. Gold was lower and silver futures declined 0.93% to $19.77 per ounce.
Currency markets were on the move as the dollar strengthened while the euro weakened on Portugal fears. The EUR/USD was lower at 1.3045 and the dollar rose against the yen to 99.02. Overall, the Dollar Index rose 0.26% on strength against the euro, the pound, the yen, and the Swiss franc.
Earnings reported Friday
Key companies that reported earnings Thursday include:
Commerce Bancshares (CBSH) reported second quarter earnings per share of $0.72 vs. $0.71 on revenue of $262.13 million vs. $262.43 million expected.
Stocks moving in the premarket included:
Fly Leasing (FLY) shares fell 1.36% premarket after the company priced a follow-on offering of 11.428 million shares at $14 from the close of $14.75.
RadioShack (RSH) shares gained 1.52% premarket as the company did not deny allegations after the close that it has hired advisors to prepare for bankruptcy.
Valero (VLO) shares fell 4.26% as the company gave a profit warnings and sees Q2 earnings per share of $0.85-0.95 vs. $1.27 estimate.
Notable companies expected to report earnings Friday include:
J.P. Morgan Chase and Co. (JPM) is expected to report second quarter earnings per share of $1.44 vs. $1.21 a year ago on revenue of $24.84 billion vs. $22.89 billion a year ago.
Wells Fargo (WFC) is expected to report second quarter earnings per share of $0.93 vs. $0.82 a year on revenue of $21.21 billion vs. $21.29 billion a year ago.
Webster Financial Corp. (WBS) is expected to report second quarter earnings per share of $0.48 vs. $0.44 a year ago on revenue of $147.63 million vs. $144.38 million a year ago.
Infosys (INFY) is expected to report first quarter earnings per share of $0.70 vs. $0.73 on revenue of $1.93 billion vs. $1.75 billion a year ago.
On the economics calendar Friday, the Reuters/University of Michigan consumer sentiment index is expected to be released and Federal Reserve members Bullard, Plosser, and Williams are set to speak.
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The solid report comes a month after the retailer closed all of its Canadian operations.
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