Early futures trading suggested opening gains on Wall Street on Friday, but after the previous session's pullback and lack of economic data to drive the market, a cautious start was expected.
After Thursday's slump, the worst one-day decline in a month, futures were higher on Friday. Dow futures were up 33 points, S&P futures added 3.7 points and Nasdaq futures were 9.5 points higher.
The interest rate debate continued, and was likely to dominate trade as expectations swung back in favour of a cut of 50 basis points when the Federal Reserve's open market comittee meets in the middle of next week.
Rate decision looms
How much do you think the Fed will ease policy by and with rates already so low, does size really matter? Join our discussion and vote in our online poll
Vote here
Thursday's Philly Fed survey and weekly jobless claims that remained stubbornly above 400,000 disappointed investors who were expecting more convincing signs that economic recovery was under way, and was likely to have a significant impact on the Fed's decision.
"This is probably the hardest and most important strategic rate cut decision the FOMC have
made in a decade. 50bp is not yet in the bag, though it has been helped by a weaker-than-expected Philly Fed, and we are feeling much more confident in this call," said Rob Carnell at Commonwealth Research.
Analysts at Credit Agricole Indosuez were less sure: "We think these expectations are optimistic and continue to look for a 25bps ease," said Mitul Kotecha. Although the Philly Fed survey was not as good as Monday's New York Empire State survey suggested it would be, it still indicated a return to expansion in the national ISM survey.
"An above 50 ISM outcome will give a clear signal of manufacturing expansion, with the expansion likely to continue into the coming months," added Mr Kotecha.
In corporate news, carmaker General Motors was likely to be in focus after it said it was to offer $10bn of debt and convertible securities to help shore up its US pension fund.
After Thursday's slump, the worst one-day decline in a month, futures were higher on Friday. Dow futures were up 33 points, S&P futures added 3.7 points and Nasdaq futures were 9.5 points higher.
The interest rate debate continued, and was likely to dominate trade as expectations swung back in favour of a cut of 50 basis points when the Federal Reserve's open market comittee meets in the middle of next week.
Rate decision looms
How much do you think the Fed will ease policy by and with rates already so low, does size really matter? Join our discussion and vote in our online poll
Vote here
Thursday's Philly Fed survey and weekly jobless claims that remained stubbornly above 400,000 disappointed investors who were expecting more convincing signs that economic recovery was under way, and was likely to have a significant impact on the Fed's decision.
"This is probably the hardest and most important strategic rate cut decision the FOMC have
made in a decade. 50bp is not yet in the bag, though it has been helped by a weaker-than-expected Philly Fed, and we are feeling much more confident in this call," said Rob Carnell at Commonwealth Research.
Analysts at Credit Agricole Indosuez were less sure: "We think these expectations are optimistic and continue to look for a 25bps ease," said Mitul Kotecha. Although the Philly Fed survey was not as good as Monday's New York Empire State survey suggested it would be, it still indicated a return to expansion in the national ISM survey.
"An above 50 ISM outcome will give a clear signal of manufacturing expansion, with the expansion likely to continue into the coming months," added Mr Kotecha.
In corporate news, carmaker General Motors was likely to be in focus after it said it was to offer $10bn of debt and convertible securities to help shore up its US pension fund.
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