In the Headlines
Investors overlooked uncertainty and even negative news early Friday, sending Wall Street futures higher.
News that Standard & Poor's officially warned that it may downgrade the U.S. credit rating did not put a dent in futures. It appears there is some progress on the debt talks. Politicians from the House who represent the two parties in the negotiations go back to their caucuses today to present options for a deal.
President Obama is scheduled to give a news conference on the matter at 11 a.m. EDT, while senators are working on a backup plan to raise the debt ceiling.
In European trade, major indices were trading lower before Wall Street's open. Investors awaited results of European bank stress tests, which are due out today.
Analysts expect that a number of lenders will need additional capital to withstand a prolonged recession. Some critics have pointed out that the tests don't account for effects of a sovereign debt default in the eurozone, an event that many economists say has a high probability of occurring.
In Asia, major indices ended mixed on Friday. A weaker yen gave Japanese manufacturers a boost, on optimism about exporting strength. Real-estate stocks fell in China, as Beijing extended residential-property buying restrictions from big cities to smaller markets.
Deal News
In deal news, Australian miner BHP Billiton (BHP) said it would acquire Petrohawk Energy (HK), a Houston-based natural gas explorer and producer, for $38.75 per share in cash. That's a deal value of $12.1 billion.
BHP fell $1.52 in early trade, a loss of 1.65%, to $90.76. Petrohawk jumped $14.98, 63.77%, to $38.47.
In another deal that's worth slightly less but involves a well-known household brand name, Clorox (CLX) has received an acquisition bid from private-equity investor Carl Icahn. He sent a letter to Clorox's CEO offering $76.70 a share for the company, for a total of $10.2 billion.
In the premarket, Clorox rose $7.70 on the news, 11.25%, to $76.13.
Economic Docket
It's another fairly busy day for U.S. econ reports. At 8:30 a.m. EDT, the Labor Department issues its consumer price index for June. Economists expect a decrease of 0.1%. The core measure, which strips out energy and food costs, is seen rising by 0.2%.
Also at 8:30 is the Federal Reserve's Empire Manufacturing data, which shows industrial activity in the New York region. Last month, the number registered a surprise tumble to -7.79, but economists see a rebound this time around to 4.75.
At 9:15, the Federal Reserve is back, with its industrial production report for June. Analysts see 0.4% growth, with capacity utilization at 76.9%. Those would mark improvements over May.
Finally, the University of Michigan releases its preliminary consumer sentiment index for July at 9:55 a.m. It's expected to show a slight decline from June's final reading of 71.5.
Before the opening bell, West Texas Intermediate crude advanced $0.20 to $95.89 a barrel.
Gold fell $8.40 to $1,580.90 an ounce.
Earnings
Ahead of the open, Citigroup (C) earned $1.09 per share, topping estimates of $0.96. Revenue also beat, coming in at $20.6 billion, vs. views of $19.886 billion.
Like many other stocks, Citigroup bounced higher along with the rest of the market recently. However, it's down 17.51% so far this year.
Mattel (MAT) said second-quarter earnings were $0.23, handily beating estimates of $0.16. Revenue of $1.16 billion also topped views of $1.11 billion. Barbie and toys related to the Pixar movie Cars 2 helped boost results for the El Segundo, Calif., company.
The stock rallied to its best level in three years last week, but has pulled back in recent sessions, finding support at its 10-week line.
Mattel shares climbed $0.56 in premarket trade, a gain of 2.09%, to $27.35.
Market Movers
Premarket price movers included Google (GOOG), which reported a blowout second quarter after Thursday's close, trouncing Wall Street views. The company cited strength in its paid search business.
Shares bolted $69 ahead of the bell Friday, a gain of 13.04%, to $597.94.
Another early gainer was Amazon (AMZN), advancing $4.50, 2.14%, to $214.88. This week, it was reported that the company would release a tablet computer later this year.
The stock cleared a two-month price consolidation last week, and shares have retreated somewhat since then.
News Corp. (NWSA) fell $0.34, 2.17%, to $15.10, as News International CEO Rebekah Brooks resigned in the wake of the voicemail hacking scandal. She headed up the U.K. newspaper division.
Analyst Actions
Goldman Sachs initiated coverage of Cerner (CERN) with a rating of Conviction Buy. Kansas City-based Cerner makes software for medical providers. Shares are up 30.46% year to date.
Deutsche Bank downgraded Diamond Foods (DMND) to Hold from Buy. The maker of snack foods and nuts has been on a tear in recent months, advancing 43.34% so far in 2011. The stock went public in July 2005.
