US pre-open: Stocks set for slightly higher open as oil rises

Stocks on Wall Street looked set for a slightly stronger open on Friday as oil prices pushed higher.

At 1130 GMT, Dow Jones Industrial Average, S&P 500 and Nasdaq futures were all 0.3% firmer.

At the same time, oil prices popped higher again, on track for solid weekly gains. West Texas Intermediate was up 1.5% to $40.78 a barrel and Brent crude was 1.4% higher at $42.13.

“On Thursday the Dow Jones Industrial Average closed in positive territory for the year after erasing its 10%+ decline in January. The rally has caught a lot of investors unawares and the associated short-covering goes a long way to explain its steep ascen,” said Jasper Lawler, market analyst at CMC Markets.

“Another explanation may be that the biggest rallies take place in bear markets. There’s no way US stocks can seriously be described as in a bear market whilst the Dow Jones is less than 1000 points from its all-time high but sentiment was materially damaged at the start of 2016 and the market remains susceptible to another big sell-off.”

In corporate news, Software maker Adobe Systems Inc rallied in pre-market trade after it reported better-than-expected quarterly results late on Thursday.

Tiffany & Co was also in the black after its fiscal fourth-quarter earnings exceeded analysts’ expectations.

Wynn Resorts edged higher after Deutsche Bank lifted its price target on the stock.

On the downside, clothing retailer Aeropostale tanked in pre-market trade followed weaker-than-expected fourth-quarter numbers on Thursday and after the company said it was considering selling itself.

The macroeconomic calendar is looking pretty light, with University of Michigan consumer sentiment at 1400 GMT the only release of note.

However, investors will also watch for speeches from New York Fed President William Dudley, Boston Fed President Eric Rosengren and St Louis Fed President James Bullard later in the day.

In currencies, the US dollar was recovering following losses in the wake of the Federal Reserve’s dovish stance on Wednesday.

The greenback was 0.3% higher versus the euro, 0.2% firmer against the pound and flat versus the yen.

Morgan Stanley said there was more short-term dollar weakness to come, however.

“The dovish Fed – discouraging USD bulls – has led to a de-positioning move supporting the once shunned currencies. GBP, AUD and many emerging market currencies fall into this category. In this respect, the falling USD has the characteristics of a pain trade that seems to have further to run,” the bank said.