Stocks Seen Heading Lower After Thursday's Record Close

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stock market futures wall street new york stock exchange
Richard Drew/AP
By Sreeja VN

U.S. stock futures point to a lower open Friday following Thursday's record highs, and ahead of corporate earnings statements from companies such as General Electric, Honeywell and Schlumberger.

Futures on the Dow Jones industrial average (^DJI) were down 0.2 percent, as were futures on the Standard & Poor's 500 index (^GPSC) and on the Nasdaq 100 index.

A number of major companies, including First Horizon National (FHN), State Street (STT), SunTrust Banks (STI), along with General Electric (GE), Honeywell International (HON) and Schlumberger (SLB), will announce quarterly earnings before market hours.

On Thursday, buoyed by stronger-than-expected quarterly earnings from a number of major companies, followed by a sharp drop in jobless claims, the Dow and S&P 500 rose to their all-time trading highs. However, the tech-heavy Nasdaq index (^IXIC) was weighed down by disappointing quarterly performances from Intel (INTC) and eBay (EBAY).

Investors are also expected to focus on the G-20 meeting starting Friday in Moscow, where finance ministers and central bank governors from member nations are expected to discuss fiscal policy, eurozone developments, financial supervision and International Monetary Fund reforms.

Analysts expect leaders to also discuss the U.S. Federal Reserve's plan to wind down its asset-purchase program.


In Europe, the Stoxx Europe 600 index was trading down 0.4 percent, retreating from a seven-week high recorded in the previous session, while London's FTSE 100 was down 0.5 percent. Germany's DAX-30 was down 0.5 percent and France's CAC-40 was trading down 0.6 percent.

In Asia, markets traded mixed Friday, with Japan's Nikkei witnessing choppy trade ahead of the Diet's upper house elections Sunday.

Earlier in the day, data released by the government showed that Japan's All Industries Activity Index, which measures the monthly change in overall production by all sectors of the Japanese economy, rose at 1.1 percent in May, compared to analyst expectations of a 1.3 percent growth. The index posted a reading of 0.1 percent in April.

However, analysts pointed out that the sell-off in Japanese markets -- the Nikkei ended down 1.48 percent after falling 2.7 percent during intraday trade on Friday -- wasn't connected to any particular news.

"It's just positioning. The market was long, and the Nikkei Stock Average has failed to break significantly higher despite the fact that the S&P 500 breached its May highs. [For traders], if you don't like the move, you get out," said Ben Collett, head of Asian equities at Sunrise Brokers, MarketWatch reported.


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