European markets rose following Wall Street’s gains despite news about the health of the British economy. The Office for National Statistics reported that GDP contracted 1.9% in the 1st quarter from the previous three-month period. That was far more than the 1.6 % decline posted in the fourth quarter of 2008 and above analysts’ expectations for a more modest 1.4 % drop. Britain’s FTSE 100 was up 1.1 % to 4,063.18, Germany’s DAX climbed 1.1 % to 4,585.80, and France’s CAC 40 grew 1 % to 3,039.08.

Asian markets traded lower as Japan’s Nikkei 225 stock average lost 139.02 points, or 1.6 %, to 8,707.99, and Hong Kong’s Hang Seng added 44.39 points, or 0.3 %, to 15,258.85. South Korea’s Kospi was off 1.1 % at 1,354.10 as officials reiterated their expectations for a full year economic contraction; the country is Asia’s 4th largest economy.

U.S. Futures

Treasury Secretary Timothy Geithner is expected to detail the methodology for the stress tests that regulators have given to 19 of the largest U.S. financial institutions. Later in the premarket, manufacturing data will be released, followed by housing news later in the morning. After being negative early in the morning, futures point higher as earnings from Ford buoyed investors. Dow Jones industrial average futures rose 29, or 0.4 %, to 7,944. Standard & Poor’s 500 index futures rose 4.10, or 0.5 %, to 852.80, while Nasdaq 100 index futures rose 9.75, or 0.7 %, to 1,351.75.

The market continued its choppy trading as quarterly earnings and forward guidance shape the action. On Thursday, the Dow finished up 0.9 %, to 7,957.06, making up most of Wednesday’s loss of 83 points. The Standard & Poor’s 500 index rose 1 %, to 851.92, and the Nasdaq composite index gained 0.4 %, to 1,652.21.The Russell 2000 index of smaller companies, however, fell 4.09, or 0.9 %, to 466.62. Wall Street got a lift from consumer discretionary tech giants Apple (AAPL) and eBay, however the days economic news clouded the macro economy.

Currencies and Commodities

The dollar traded at 97.029 yen, falling 0.9605% in the currency market. The euro appreciated 0.7917% to $1.3242 The pound depreciated 0.8722% to $1.4594 after the Daily Telegraph said Moody’s Investors Service and Standard & Poor’s are reviewing the U.K.’s AAA credit rating on concern about the nation’s rising debt burden. Precious metals were moderately higher as gold rose $3.90 to $910.50 an ounce, while silver gained 0.14% to $12.76. In the bond market, the yield on the benchmark 10-year Treasury note rose to 2 basis points to 2.95% on falling demand for treasury securities. Light, sweet crude for June delivery rose 47 cents to $50.09 a barrel on the NYMEX; a 0.95% gain.

Corporate News

Amazon.com Inc (AMZN) saw earnings climb 24 % to $177 million, or 41 cents per share, compared with $143 million, or 34 cents per share, in the year-ago quarter. The company’s quarterly results beat the 31 cents per share analyst expectations. Revenue rose 18 % to $4.89 billion, slightly higher than analyst estimates of $4.76 billion.

Even the unflappable Microsoft (MSFT) has been impacted by this recession as it reported its first year-over-year decline in quarterly sales since it went public in 1986 and said it expects “weakness to continue through at least the next quarter.” Net income for the period ended in March fell to $2.98 billion, or 33 cents a share, from $4.39 billion, or 47 cents a share, in the same period a year earlier. Revenue slipped 6% to $13.65 billion; analysts were expecting earnings of 39 cents a share on revenue of $14.1 billion.

Ford (F), the nation’s 2nd largest car manufacturer, reported a 1st quarter loss of $1.4 billion. However their burn rate of cash was reduced to $3.7 billion in the quarter from $7.2 billion as the company restructures without assistance from the federal government. Revenue fell 37 % to $24.8 billion, better than the $22 billion analysts expected with Ford’s U.S. sales down 43 % from last year. Excluding onetime items, the company lost 75 cents per share compared to analyst predictions of $1.23 per share loss.

Economic News

On Thursday, the National Association of Realtors reported that home sales fell 3 % to an annual rate of 4.57 million in March. On the jobs front, the Labor Department reported a rise in new unemployment claims last week that was more than expected. The number of workers continuing to file claims for jobless benefits topped 6.13 million, which is the 12th straight weekly record.

8:30 AM
Durable goods orders: Measures the month over month change in orders placed with domestic manufacturers for immediate and future delivery of factory hard goods. Usually durable goods orders follow the trend in consumer spending, and therefore, a measure of strength in the economy. The consensus estimate is for a decline in March of 1.8%, following a 3.4% increase in February.

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New Home Sales: Measure the number of newly constructed homes with a committed sale during the month of March. The level of new home sales indicates trends in the housing market. Don’t expect new home sales to pick up until we can unclog the inventory of existing homes. For March, new home sales are expected to be at a seasonally adjusted annual rate of 330,000 after rising 4.7% in February to 337,000.

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