U.S. Stocks May Extend Yesterday's Pullback In Early Trading

Stocks may move to the downside in early trading on Friday, extending the sharp pullback seen over the course of the previous session. The major index futures are currently pointing to a lower open for the markets, with the S&P 500 futures down by 0.5 percent.

Concerns about the outlook for interest rates may continue to weigh on Wall Street amid worries the Federal Reserve may need to raise rates higher than currently anticipated in order to bring down inflation.

The downward momentum also comes amid a negative reaction to some of the latest earnings news, with shares of Lyft (LYFT) plummeting by 31.6 percent in pre-market trading.

The steep drop by Lyft comes after the ride-sharing company reported an unexpected fourth quarter loss and provided disappointing revenue guidance for the current quarter.

Travel company Expedia (EXPE) may also move to the downside after reporting fourth quarter results that missed analyst estimates on both the top and bottom lines.

Meanwhile, shares of Yelp (YELP) are likely to see initial strength after the consumer review platform reported fourth quarter results roughly in line with estimates and provided upbeat guidance for 2023.

Not long after the start of trading, the University of Michigan is scheduled to release its preliminary reading on consumer sentiment in the month of February. The consumer sentiment index is expected to inch up to 65.0 in February from 64.9 in January.

The report includes readings one short-term and long-term inflation expectations that could impact the outlook for interest rates.

After failing to sustain an initial move to the upside, stocks showed a significant downturn over the course of the trading session on Thursday. The major averages pulled back well off their early highs and into negative territory.

The major averages climbed off their worst levels going into the close but remained firmly in the red. The Dow fell 249.13 points or 0.7 percent to 33,699.88, the Nasdaq slumped 120.94 points or 1.0 percent to 11,789.58 and the S&P 500 slid 36.36 points or 0.9 percent to 4,081.50.

In overseas trading, stock markets across the Asia-Pacific region turned in another mixed performance on Friday. Japan’s Nikkei 225 Index rose by 0.3 percent, while China’s Shanghai Composite Index fell by 0.3 percent and Hong Kong’s Hang Seng Index plunged by 2.0 percent.

Meanwhile, the major European markets have all moved to the downside on the day. While the German DAX Index has tumbled by 1.4 percent, the French CAC 40 Index is down by 1.2 percent and the U.K.’s FTSE 100 Index is down by 0.7 percent.

In commodities trading, crude oil futures are climbing $0.69 to $78.75 a barrel after falling $0.41 to $78.06 a barrel on Thursday. Meanwhile, after sliding $12.20 to $1,878.50 an ounce in the previous session, gold futures are slipping $5.30 to $1,873.20 an ounce.

On the currency front, the U.S. dollar is trading at 130.68 yen versus the 131.59 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.0691 compared to yesterday’s $1.0740.

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