Sharp Pullback By Crude Oil Prices May Lead To Initial Rebound On Wall Street

(RTTNews) - Stocks are likely to move to the upside in early trading on Friday, regaining ground after trending lower over the past several sessions. The major index futures are currently pointing to a higher open for the markets, with the S&P 500 futures up by 0.6 percent.

Early buying interest is likely to be generated in reaction to a sharp pullback by the price of crude oil, which has skyrocketed over the past few days.

After soaring by more than 12 percent since the start of the week, U.S. crude oil futures are plunging by nearly 3 percent on the day.

Crude oil futures have pulled back below $100 a barrel after the Financial Times reported Iran and Oman will meet with Gulf states next week to discuss reopening shipping through the Strait of Hormuz.

Bargain hunting is also likely to contribute to initial strength on Wall Street after the recent weakness dragged the Dow and S&P 500 down to their lowest levels in over a month.

The futures remained firmly positive following the release of the Labor Department's closely watched report on consumer price inflation in the month of August.

The report showed consumer prices increased in line with economist estimates, although core consumer prices rose by slightly more than expected.

The Labor Department said its consumer price index climbed by 0.4 percent in August after inching up by 0.1 percent in July.

Meanwhile, excluding sharply higher energy prices and an uptick in food prices, core consumer prices rose by 0.3 percent in August after edging up by 0.2 percent in July. Economists had expected core prices to rise by another 0.2 percent.

The report also said the annual rate of consumer price growth was unchanged at 3.4 percent, while the annual rate of core consumer price growth dipped to 2.4 percent in August from 2.5 percent in July, which matched expectations.

Shortly after the start of trading, the University of Michigan is scheduled to release its preliminary reading on consumer sentiment in the month of September. The consumer sentiment index is expected to edge down to 51.0 in September from 51.7 in August.

Stocks moved mostly lower during trading on Thursday, extending the downward move seen over the past several sessions. With the continued weakness, the Dow and S&P 500 dropped to their lowest closing levels in over a month.

The major averages all finished the day firmly in negative territory. The Dow fell 316.56 points or 0.6 percent to 52,064.10, the Nasdaq slid 171.62 points or 0.7 percent to 26,081.72 and the S&P 500 declined 44.66 points or 0.6 percent to 7,591.70.

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Friday. Japan's Nikkei 225 Index tumbled by 1.9 percent, while China's Shanghai Composite Index slumped by 1.2 percent.

The major European markets have also moved back to the upside on the day. While the German DAX Index is up by 0.5 percent, the French CAC 40 Index and the U.K.'s FTSE 100 Index are both up by 0.6 percent.

In commodities trading, crude oil futures are plunging $3.31 to $99.17 a barrel after soaring $6.43 to $102.48 a barrel on Thursday. Meanwhile, after tumbling $53.40 to $4,407.30 an ounce in the previous session, gold futures are falling $16.10 to $4,426.80 an ounce.

On the currency front, the U.S. dollar is trading at 153.66 yen versus the 154.42 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.1596 compared to yesterday's $1.1610.