The major U.S. index futures are currently pointing to a roughly flat open on Friday, with stocks likely to show a lack of direction after recovering from an early downturn and ending the previous session roughly flat.
Stock futures had come under pressure earlier in the morning amid a negative reaction to earnings news from several big-name companies.
Financial giants Bank of America (BAC) and Wells Fargo (WFC) continue to see notable pre-market weakness after reporting their fourth quarter results.
UnitedHealth (UNH) has also slumped even though the health insurance giant reported fourth quarter results that beat analyst estimates on both the top and bottom lines.
On the other hand, shares of JPMorgan Chase (JPM) have jumped after the financial giant reported a record annual profit.
The futures have bounced back near the unchanged line following the release of a Labor Department report showing producer prices in the U.S. unexpectedly edged slightly lower in the month of December.
The Labor Department said its producer price index for final demand slipped by 0.1 percent in December, matching a revised dip in November.
Economists had expected producer prices to inch up by 0.1 percent compared to the unchanged reading originally reported for the previous month.
Meanwhile, the report said the annual rate of producer price growth accelerated to 1.0 percent in December from a downwardly revised 0.8 percent in November.
The annual rate of producer price growth was expected to speed up to 1.3 percent from the 0.9 percent originally reported for the previous month.
The data may lead to renewed optimism about the outlook for interest rates following yesterday’s report showing consumer prices rose by slightly more than expected in December.
After turning lower over the course of morning trading on Thursday, stocks staged a notable recovery attempt in the latter part of the session. The major averages climbed well off their worst levels of the day, eventually closing roughly flat.
The Dow fell as much as 270 points but rebounded to end the day up 15.29 points or less than tenth of a percent at 37,711.02. The Nasdaq also crept up 0.54 points or less than a tenth of a percent to 14,970.19, but the S&P 500 edged down 3.21 points or 0.1 percent at 4,780.24.
The early downturn on Wall Street came as traders digested the Labor Department’s highly anticipated report on consumer price inflation in December, which showed prices rose by slightly more than expected.
The Labor Department said its consumer price index climbed by 0.3 percent in December after inching up by 0.1 percent in November. Economists had expected consumer prices to rise by 0.2 percent.
Excluding food and energy prices, core consumer prices still rose by 0.3 percent in December, matching the increase seen in November as well as economist estimates.
The report also showed the annual rate of consumer price growth accelerated to 3.4 percent in December from 3.1 percent in November. The annual rate of growth was expected to tick up to 3.2 percent.
Meanwhile, the annual rate of growth by core consumer prices slowed to 3.9 percent in December from 4.0 percent in November. Economists had expected the pace of core price growth to decelerate to 3.8 percent.
A number of economists have said the data makes the Federal Reserve less likely to cut interest rates in March, with many predicting the central bank will hold off until its May meeting.
Nonetheless, persistent optimism about a March rate cut may have contributed to the late-day recovery attempt by stocks, with CME Group’s FedWatch Tool currently still indicating a 70.0 percent chance the Fed will lower rates.
The late-day recovery attempt on Wall Street also came as treasury yields showed a notable move to the downside after showing a lack of direction for much of the day.
Despite the recovery by the broader markets, interest rate-sensitive utilities stocks continued to see substantial weakness, with the Dow Jones Utility Average tumbling by 2.2 percent.
Natural gas stocks also saw considerable weakness amid a decrease by the price of the commodity, dragging the NYSE Arca Natural Gas Index down by 1.4 percent.
Telecom, biotechnology and banking stocks also moved to the downside on the day, while some strength emerged among software and oil stocks.