Stocks were indicated to open higher Friday as index futures surged in Globex trading in a rebound from this week's losses. The market, which fell Wednesday, historically rises on the day after Thanksgiving following pre-holiday loss, notes Standard & Poor's MarketScope. But traders worried by Fed projections of sluggish GDP growth over the next 3 years.
The stock market will close at 1:00 pm ET Friday, typically one of the slowest sessions of the year for Wall Street.
On Wednesday, the Dow Jones industrial average finished lower by 211.1 points, or 1.6%, to 12,799.04, well below the psychologically important 13,000 level. The broader S&P 500 index lost 22.93 points, or 1.59%, to 1,416.77. The index started 2007 at 1418, and is now in slightly negative territory for the year. The Nasdaq Composite was off 34.66 points, or 1.34%, to 2,562.15.
There were no significant economic reports scheduled for release during Friday's shortened session. Many Fed officials are slated to speak next week, and the government will release third-quarter GDP results next Thursday, which are expected to be revised to the 5% growth level.
Credit concerns remained a focus on Wall Street. According to a Wall Street Journal report, Bank of America (BAC), Citigroup (C), and JPMorgan Chase (JPM) are drawing up a plan to ease the credit markets are expected to ask others in the industry to help out next week. The three are spearheading an effort to raise billions of dollars for a new fund that is supposed to help structured investment vehicles sell hard-to-value paper they hold without further unnerving already jittery credit markets.
The banks have asked BlackRock (BLK) to act as the lead asset manager for the $75 billion fund they are creating to support the asset-backed securities market, a source told Reuters. According to the Journal, bankers involved in assembling the plan have said they would like to get the superfund running by January.
The Federal Reserve's gloomier than expected projections for economic growth issued earlier in the week continued to reverberate on Wall Street Friday. Economist Jan Hatzius of Goldman Sachs (GS) wrote in a note Friday that although the FOMC minutes sounded quite hawkish, the firm expects the FOMC to change its mind on the need for further monetary easing -- partly because of deteriorating economic data and partly because of the tightening in financial conditions. But, according to Hatzius, "[t]he most important risk is not the decline in broad equity market indexes, but the increased risk of damage to the financial system signaled by the sharp downturn in financial sector stock prices."
"Our own views are even more bearish on the near-term growth outlook than those of the FOMC, but considerably more optimistic about the long-term picture," wrote Hatzius. Goldman expects real GDP to grow at close to a 3% trend in the longer term. "Consequently, we expect a higher unemployment rate and more room for monetary easing."
In the energy markets Friday, January West Texas Intermediate crude oil futures, which fell 74 cents Wednesday, were off 88 cents to $96.41 per barrel. According to a Reuters report, Roy Mason of Oil Movements said that OPEC oil exports, excluding Angola, will rise by 720,000 barrels per day in the four weeks to Dec. 8. Oil also being hurt by the dollar's recovery from fresh record lows.
December gold futures, which rose $7.20 Wednesday, up $11.10 to $809.70, spot gold up $6.00 to $810.30 even though the dollar index was bit higher and the euro tumbled from record highs on worries a world financial turmoil will cause a bigger-than-expected slowdown in the euro zone, prompting the single currency to tumble.