Stocks May Lack Direction Amid Focus On Washington - U.S. Commentary
Stocks may show a lack of direction in early trading on Friday following the strong upward move seen in the previous session. The major index futures are currently pointing to a roughly flat open for the markets, with the Dow futures down by just 11 points.
Traders may be reluctant to make any significant moves amid uncertainty about the prospects for the Senate Republican tax reform bill.
Optimism about passage of the bill contributed to the strength seen on Thursday, although GOP leaders were forced to delay a final vote after the legislation hit a snag.
Reports suggest the Senate parliamentarian ruled against the so-called "trigger" proposed by Senator Bob Corker, R-Tenn., which would raise taxes if the economic growth generated by the tax cuts does not offset the cost.
The latest reports suggest that Republicans have rounded up enough votes to pass a revised bill, with a series of roll call votes scheduled for 11 am ET.
The outcome of the final vote on the tax reform bill is likely to have a major impact on the markets, as optimism about a corporate tax rate cut has been a key driver behind the run by stocks to new record highs.
Shortly after the start of trading, the Institute for Supply Management is scheduled to release its report on manufacturing activity in the month of November.
The ISM's purchasing managers index is expected to edge down to 58.4 in November from 58.7 in October, but a reading above 50 would still indicate growth in the manufacturing sector.
The Commerce Department is also due to release its report on construction spending in the month of October. Construction spending is expected to climb by 0.5 percent.
Following the mixed performance seen on Wednesday, stocks moved mostly higher during trading on Thursday. With the upward move on the day, the Dow and the S&P 500 reached new record closing highs.
The major averages finished the day firmly in positive territory but off their highs of the session. The Dow surged up 331.67 points or 1.4 percent to 24,272.35, the Nasdaq climbed 49.58 points or 0.7 percent to 6,873.97 and the S&P 500 advanced 21.51 points or 0.8 percent to 2,647.58.
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Friday. Japan's Nikkei 225 Index rose by 0.4 percent, while Hong Kong's Hang Seng Index fell by 0.4 percent.
Meanwhile, European stocks have moved mostly lower on the day. The French CAC 40 Index and the German DAX Index are both down by 0.6 percent, although the U.K.'s FTSE 100 Index is just above the unchanged line.
In commodities trading, crude oil futures are rising $0.39 to $57.79 a barrel after inching up $0.10 to $57.40 a barrel on Thursday. Meanwhile, after sliding $9.50 to $1,276.70 an ounce in the previous session, gold futures are unchanged.
On the currency front, the U.S. dollar is trading at 112.63 yen compared to the 112.54 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.1875 compared to yesterday's $1.1904.