MARKET SNAPSHOT: S&P Looks Set For Push Into Record Territory

By Anora Mahmudova and Sara Sjolin, MarketWatch

Empire state index rebounds in May

U.S. stock futures pushed higher on Friday, as investors assessed manufacturing data and their implications on the Federal Reserve's monetary policy.

The Empire State manufacturing index, which rebounded slightly in May, fell short of expectations, continuing the trends of weakness in the economy.

Futures for the Dow Jones Industrial Average (YMM5) added 20 points, or 0.1%, to 18,221, indicating the blue-chip benchmark could inch further toward an all-time closing high. On Thursday, it ended just 0.2% shy of its record close of 18,288.63, hit March 2.

The S&P 500 index (SPX) managed to ring up a new closing high on Thursday, and Friday looked set to be an upbeat trading day, too. Futures for the index (ESM5) traded 2.5 points higher, or 0.1%, at 2,120.

Futures for the Nasdaq 100 index (NQM5) climbed about 11 points, or 0.2%, to 4,501, after closing 1.4% higher on Thursday.

Craig Erlam, senior market analyst at OANDA, said the moves on Friday reflected "calmness that has returned to the bond markets" after a volatile week in fixed-income trading.

"Bond markets now appear to have stabilized, and if anything, they're paring some of the losses, which is helping overall sentiment," he said. "The perception that the Fed will be forced to hold off on its first rate hike a little longer, following those weak retail-sales figures on Wednesday, is also supporting equity markets."

U.S. stocks have been weaving in and out of losses this week, as investors digested the battered bond markets and a string of mixed data that raised questions about the strength of the U.S. economy. This has spurred speculation the Fed will wait to raise interest rates until later this year, rather than in June, which some market participants had been forecasting.

Former Fed Vice Chairman Donald Kohn said the debate over rate-hike timing is focused on a move between September and December (http://www.marketwatch.com/story/feds-rate-hike-choice-is-september-or-december-kohn-says-2015-05-14).

Data: The Empire State manufacturing index moved back into positive territory in May, but only barely. The index, a first reading of manufacturing conditions in the month, inched up to 3.1 from negative 1.2 in April, the New York Fed said Friday. That was below the MarketWatch-compiled economist forecast for a reading of 5.5.

At 9:15 a.m. Eastern, industrial production and capacity utilization -- both for April -- are scheduled for release. The University of Michigan reading on consumer sentiment comes out at 10 a.m. Eastern, and is predicted to show a pullback in May from 95.9 in April (http://www.marketwatch.com/story/as-consumer-sentiment-perks-up-the-question-of-spending-looms-2015-05-01).

"Gasoline prices have risen in recent weeks, while equity-market volatility has picked up as stock prices have declined. Both factors suggest that sentiment may slip in May from the strong April reading," analysts at Barclays said in a note.

Movers and shakers: Shares of Netflix Inc. (NFLX) rose 3.6% in premarket trade after reports the entertainment-streaming service is in talks with a Chinese media company to enter China's online-video market (http://www.bloomberg.com/news/articles/2015-05-15/netflix-said-in-talks-to-enter-china-with-jack-ma-backed-wasu).

Avon Products Inc.(AVP) gave up 2.4% ahead of the bell after what appeared to be a bogus takeover offer on Thursday (http://www.marketwatch.com/story/sec-looking-into-dubious-bid-for-avon-2015-05-15).

El Pollo Loco Holdings Inc.(LOCO) slumped as much as 12% after the fast-food chain late Thursday reported sales below forecasts.

King Digital Entertainment PLC(KING) slid 9% ahead of the bell after the "Candy Crush" maker late Thursday reported a drop in revenue (http://www.marketwatch.com/story/candy-crush-maker-reports-higher-profit-2015-05-14).

On a more upbeat note, Yum! Brands Inc.(YUM) put on 1.1% after the fast-food company was upgraded to overweight from neutral at J.P. Morgan.

Shares of Nordstrom Inc.(JWN) climbed 1.2%, shaking off weaker-than-expected earnings from late Thursday.

Other markets: European stock markets rose almost across the board (http://www.marketwatch.com/storyno-meta-for-guid), building on gains from Thursday when the European Central Bank's president, Mario Draghi, underlined the bank's commitment to stimulus efforts.

In Asia, Hong Kong's Hang Seng Index closed 2% higher (http://www.marketwatch.com/storyno-meta-for-guid), boosted by talk that a stock-connect program between Hong Kong and Shenzhen will be announced as soon as this weekend.

Oil (http://www.marketwatch.com/storyno-meta-for-guid)(CLM5) and most metals declined, while the ICE dollar index (DXY) moved a leg higher to trim its weekly loss to 1.1%.

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