Market News

The major equity averages have turned lower in recent trade.
Energy stocks continue to sport impressive gains, though. Occidental Petroleum (OXY 112.32, +7.19) is a top performer as it extends the prior session's gains, which came in response to a stronger-than-expected earnings report. Meanwhile, Chevron (CVX ) is up, but much more modestly.Overall, the energy sector is up 1.2%, which is far stronger than any other major sector.

GBP/USD rises to $1.6710 area and slight shy of recent high around $1.6713. Cable remains shy of the Thursday and 2011 high at $1.6747 and faces offers in place at $1.6720/25 and $1.6750.

Strength among a few blue chips has the Dow up solidly to its best level in nearly three years, but the tech-rich Nasdaq remains mired near the neutral line.
Shares of Caterpillar (CAT 115.62, +2.98) have spiked to a record high on the back of a better-than-expected earnings report. An upside earnings surprise from Merck (MRK 35.90, +0.13) and an analyst upgrade of Procter & Gamble (PG 64.96, +0.46) have helped the Dow extend its recent streak of gains - it's up for the seventh time in eight sessions.
Microsoft (MSFT 25.59, -1.12) has been a drag on the Dow, though. Its 4% drop comes as investors shrug off better-than-expected earnings in light of the firm's narrowed margins and reduced target prices among a handful of analysts. Verizon (VZ 37.75, -0.52) has also hampered the Dow following its downgrade at Citigroup.
Research In Motion (RIMM 49.01, -7.58) is in some of the worst shape of any stock this session. Its precipitous drop to a a six-month low comes in response to a disappointing forecast.

   

Oil holds gains of $0.48, trades at $113.34 amid of firm commodity prices, black gold in the upper reaches of its $112.25/113.55 range.

A recent spurt of buying interest took the Nasdaq back to the neutral line, but it has failed to poke back into positive territory. Weakness in shares of Research In Motion (RIMM 48.83, -7.76) has hampered the tech-rich Index. Shares of RIMM are down dramatically in high volume, which is already quadruple its daily average, in response to a disappointing forecast for earnings. The stock now sits at a six-month low.

The Dollar index was headed for its biggest monthly decrease since September as a slowing U.S. economy encouraged the Federal Reserve to maintain stimulus.
“There’s a perception out there that a weak dollar might well be good for the U.S. economy in the short term, given some signs of softer growth,” said Alan Ruskin at Deutsche Bank AG. “The market really took Bernanke as a green light to weaken the dollar further.”
“With the extraordinary weakening of the dollar this week, people are taking profit in quiet market conditions,” said Carl Forcheski at Societe Generale SA.
The Swiss franc and Australian dollar rallied to records against the greenback amid signs of accelerating inflation.
The franc appreciated against the dollar as Swiss National Bank President Philipp Hildebrand said that price stability may be threatened by higher commodity prices and expansionary monetary policy. Switzerland’s leading economic indicator unexpectedly increased in April, signaling the economy is gaining momentum.
The Australian dollar extended its biggest monthly gain this year and reached a record as Treasurer Wayne Swan said the currency’s strength reflects the improving economy and higher commodity prices.
Consumer prices in Australia increased 1.6% last quarter from the previous three months, the biggest jump since 2006.
The dollar dropped for a ninth day versus the euro to the weakest level since December 2009.
Economic growth slowed to a 1.8% annual rate last quarter from 3.1% in the prior three months, the Commerce Department reported yesterday.
Bernanke signaled on April 27 in his first press conference following a policy decision that the central bank will likely continue reinvesting maturing debt after its $600 billion program of bond buying expires in June as planned.
The euro was poised for a fifth monthly gain on speculation the European Central Bank will increase borrowing costs further while Federal Reserve Chairman Ben S. Bernanke said this week he was unsure when U.S. monetary stimulus will unwind.
Inflation in the 17-nation euro region quickened to 2.8% in April.
China’s yuan strengthened beyond 6.5 per dollar for the first time since 1993. The currency gained for a third day on speculation the central bank will let its currency appreciate faster to curb accelerating inflation.
Consumer prices in Asia’s biggest economy rose 5.4% in March from a year earlier, the most since July 2008.

GBP/USD spikes to fresh highs for the day around $1.6690 and amid thin conditions, while EUR/GBP extends its losses from the overnight high at stg0.8936 to currently stg0.8888 area. Cable offers noted earlier at $1.6690/00 while euro-sterling holds bids at stg0.8880.

USD/CAD on the defensive but off its low for the day. Canadian dollar is weaker in the wake of a disappointing Feb GDP outcome and also ahead of a Monday election where the outcome seems far from certain. After beginning the session around C$0.9495, dollar lifted to near C$0.9550 in the wake of the morning data but has retraced to C$0.9520.

Gold prices posted a new life high of $1542.91/oz (up from an earlier of $1531.75). The next topside target is $1550. Barclays Capital technical analysts say the trend for gold remains bullish, and they maintain their topside targets of $1548 and $1615 (channel resistance at $1600).

Prices paid 81.8. New orders 66.3, employment 63.7, inventories 53.5, production 70.0.

Investors were hoping for another day of gains, with U.S. stock futures edging higher ahead of Friday's opening bell on the back of relatively decent earnings.

Investors remain nervous about the economy and inflation. The Fed has been pretty clear that interest rates aren't likely to budge this year. Meanwhile, gold and silver continue to hit new highs as the U.S. dollar keeps sliding, falling to a three-year low against the euro.
On Thursday, U.S. stocks rose to multi-year highs, as investors looked beyond a series of mixed earnings reports and disappointing GDP and jobless claims reports.
Ahead of Friday's opening bell, Dow components Caterpillar (CAT) and Merck (MRK) reported better-than-expected earnings.
Merck's quarterly profit tripled, on strong drug sales, while Caterpillar benefited from strong demand for bulldozers and other machinery. Shares of Merck edged up 1.5%, while Caterpillar's stock rose nearly 3%.
Chevron (CVX) is also slated to deliver quarterly results before the bell. Analysts forecast Chevron will post a profit of $3 per share.
Companies: Late Thursday, Microsoft reported a 31% surge in quarterly profit, on strong Office and Kinect sales. But not all the news was good, as netbook sales fell 40%.
Microsoft's (MSFT) stock slipped 1% in premarket trading.
Research in Motion on Thursday cut its forecast for the current quarter, citing sluggish Blackberry sales. RIM's (RIMM) stock price fell nearly 12% in premarket trading.
World markets:

Oil for June delivery were flat at $112.86 a barrel.
The price on the benchmark 10-year U.S. Treasury slipped, pushing up the yield slightly to 3.32%.

Data released:
06:00     Germany     Retail sales (March) real adjusted    -2.1%    0.2%    -0.3%
06:00     Germany     Retail sales (March) real unadjusted Y/Y    -3.5%    1.4%    1.1%
08:00     EU(17)     M3 money supply (March) adjusted Y/Y    2.3%    2.1%    2.0%
08:00     EU(17)     M3 money supply (3 months to March) adjusted Y/Y    2.0%    1.9%    1.7%
09:00     EU(17)     Harmonized CPI (April) Y/Y preliminary    2.8%    2.7%    2.6%
09:00     EU(17)     Unemployment (March)    9.9%    9.9%    9.9%
09:00     EU(17)     Economic sentiment index (April)    106.2    107.1    107.3
09:00     EU(17)     Business climate indicator (April)    1.28    1.40    1.43 (1.41)

The US currency weakened this month as the Fed maintained a near- zero benchmark interest rate and boosted the supply of the U.S. currency by buying Treasuries, a policy known as quantitative easing that is set to end in June.
The Swiss franc strengthened to a record against the dollar. Switzerland’s leading economic indicator unexpectedly increased in April, signaling the economy is gaining momentum. The index climbed to 2.29 compared with a revised 2.25 in March, the KOF Swiss Economic Institute said in a statement today. That’s the highest since August 2006. Economists expected a decline to 2.20.
China’s yuan strengthened beyond 6.5 per dollar for the first time since 1993, supported by speculation the central bank will allow appreciation to help tame the fastest inflation in more than two years.
The currency’s seventh weekly gain, its longest winning streak since July 2008, may damp U.S. criticism of China’s exchange-rate policy before Vice Premier Wang Qishan heads to Washington next month for talks with Treasury Secretary Tim Geithner. Consumer prices in Asia’s biggest economy rose 5.4% from a year earlier in March, exceeding the government’s 4% goal for this year.

GBP/USD retreats from session highs on $1.6690. Currently rate holds around $1.6666. 

Moves through stg0.8925 to take out the reported barrier here and currently holds around stg0.8920. Cross earlier printed highs around stg0.8935. Next resistance seen between stg0.8940/50.

EUR/USD
Offers: $1.4900, $1.4930/35, $1.4950, $1.4990/000
Bids: $1.4825/20, $1.4800/795, $1.4750

Extends to $1.4865, but progress seen slow as rate attempts to advance on Thursday's posted high of $1.4881. Above this level and the Dec 7 2009 high at $1.4903 moves into view.

The Dollar Index fell to its lowest level in more than two years as the U.S. economy expanded in the first quarter at a slower rate than forecast, encouraging the Federal Reserve to keep borrowing costs low.
The U.S. currency fell against the euro and yen after the Commerce Department reported that gross domestic product rose at a 1.8 percent annual pace in the first quarter after a 3.1 percent rate of expansion in the last three months of 2010. The median forecast of economists was for a 2 percent pace of growth. 
The yen appreciated versus most of its major counterparts after a report showed Japanese investors sold foreign assets last week.
The yen rallied today as Japanese investors were net sellers of foreign bonds during the week ended April 22. They sold 171.8 billion yen ($2.1 billion) in overseas bonds and notes and 5.6 billion yen in overseas stocks, according to figures based on reports from designated major investors released by the Ministry of Finance in Tokyo. They bought 14.6 billion yen in overseas short-term securities. The total net sale was 162.8 billion yen. 
New Zealand’s dollar was one of the worst performers against the greenback after Reserve Bank Governor Alan Bollard called the currency’s recent advance “unwelcome.” The dollar sank a day after Fed Chairman Ben S. Bernanke said he was unsure when monetary stimulus will unwind.

EUR/USD: the pair bargained in a range $1,4770-$ 1,4880.

GBP/USD: the pair shown high in the field of $1,6740 then decreased. The rate finished session in around $1,6630.

USD/JPY: the pair decreased in around 81,50.

Hang Seng -0.36% 23,720.81