LONDON (ShareCast) – Dow Futures climbed higher before the open on Friday, supported by a healthy gains in European markets as ‘Grexit’ fears receded on hopes the Greek government and the EU can work out a deal in Brussels. A joint statement by Greece and their EU counterparts said the country will submit a “full list of specific reforms” in the next few days and Greek prime minister Alexis Tsipras said he was optimistic the EU will work to restore funding as soon as possible.
At 1300 GMT, the Dow Jones Industrial Average front month futures contract rose 0.8% or 125 points to 18,024 while the corresponding S&P 500 contract added 0.7% or 15 points to 2,102. The Dow has gained 1.2% so far this week, through Thursday’s close, and the S&P has advanced 1.75% in the same period.
Although they gave up some gains on Thursday, US equity markets are continuing to react to a dovish Federal Reserve who on Wednesday said it was in no rush to raise rates even as it opened the door to monetary tightening this year.
“The word ‘Patience’ was removed, but there was not much else for hawks to cheer about in statement,” said analysts at Citibank.
With little in the way of economic data, the attention was on Fed-talk for more clues over upcoming monetary tightening by the central bank. Atlanta Fed head Dennis Lockhart is scheduled to speak on the economy and monetary policy and Chicago Fed boss Charles Evans will be on a panel discussing risk management in Washington.
In company news, Nike (Sao Paolo: NIKE34.SA – news) sales rose 7% over the holiday quarter, but the company said the stronger dollar weighed on revenue growth and the value of future orders.
Jeweler Tiffany & Co warned of minimal growth in 2015 as the strong dollar weighs on translating overseas sales.
In other asset classes, the US dollar paused for breath with euro gaining 0.7% to $ 1.0754.
Gold futures added 0.2% to $ 1171.40 an ounce, while Brent crude-oil futures slipped 0.5% to $ 54.14 a barrel.
In the fixed income market, the yield on the 10-year Treasury note fell to 1.962%.