U.S. Stocks May Give Back Ground In Early Trading

After moving sharply higher over the course of the previous session, stocks may move back to the downside in early trading on Friday. The major index futures are currently pointing to a lower open for the markets, with the S&P 500 futures down by 0.6 percent.

Profit taking may contribute to initial weakness on Wall Street, as some traders look to cash in on yesterday’s rally amid lingering concerns about turmoil in the financial sector.

Shares of First Republic Bank (FRC) are showing a significant pullback in pre-market trading, with the bank plunging by 22.6 percent after surging by 10.0 percent on Thursday.

The jump in the previous session came as a group of financial institutions agreed to deposit $30 billion in First Republic in an effort to express confidence in the banking system.

Overall trading activity may be somewhat subdued, however, as traders look ahead to the Federal Reserve’s monetary policy decision next Wednesday.

CME Group’s FedWatch Tool is currently indicating a 26.9 percent chance the Fed will leave rates unchanged and a 73.1 percent chance of a 25 basis point rate hike.

Just before the start of trading, the Fed is scheduled to release its report on industrial production in the month of February. Industrial production is expected to rise by 0.2 percent in February after coming in unchanged in January.

The University of Michigan is also due to release its preliminary report on consumer sentiment in the month of March shortly after the start of trading.. The consumer sentiment index is expected to be unchanged at 67.0.

The Conference Board is also scheduled to release its report on leading economic indicators in the month of February. The leading economic index is expected to dip by 0.2 percent in February after falling by 0.3 percent in January.

Stocks recovered from early weakness and moved sharply higher over the course of the trading session on Thursday. The major averages all showed strong moves to the upside on the day, with the tech-heavy Nasdaq leading the advance.

While the Nasdaq spiked 283.22 points or 2.5 percent to 11,717.28, closing higher for the fourth straight session, the S&P 500 surged 68.35 points or 1.8 percent to 3,960.28 and the Dow jumped 371.98 points or 1.2 percent to 32,246.55.

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Friday. Japan’s Nikkei 225 Index shot up by 1.2 percent, while China’s Shanghai Composite Index climbed by 0.7 percent.

Meanwhile, the major European markets have moved to the downside on the day. While the French CAC 40 Index has slid by 0.8 percent, the German DAX Index is down by 0.7 percent and the U.K.’s FTSE 100 Index is down by 0.5 percent.

In commodities trading, crude oil futures are slipping $0.21 to $68.14 a barrel after climbing $0.74 to $68.35 a barrel on Thursday. Meanwhile, after falling $8.30 to $1,923 an ounce in the previous session, gold futures are jumping $27.10 to $1,950.10 an ounce.

On the currency front, the U.S. dollar is trading at 132.10 yen versus the 136.44 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.0618 compared to yesterday’s $1.0610.

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