Stocks: Focus on earnings, gold and dollar

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premarket, stocksClick on chart for market data By CNNMoney staffApril 29, 2011: 8:17 AM ET

NEW YORK (CNNMoney) — Investors were hoping for another day of gains, with U.S. stock futures edging higher ahead of Friday’s opening bell on the back of relatively decent earnings.

The recent modest gains are primarily “a sign that our expectations got reduced to nothing,” said David Wyss, chief economist for Standard & Poor’s.

Investors remain nervous about the economy and inflation. The Fed has been pretty clear that interest rates aren’t likely to budge this year. Meanwhile, gold and silver continue to hit new highs as the U.S. dollar keeps sliding, falling to a three-year low against the euro.

Dow Jones industrial average (INDU), S&P 500 (SPX) and Nasdaq (COMP) futures were slightly higher ahead of Friday’s opening bell. Futures measure current index values against perceived future performance.

On Thursday, U.S. stocks rose to multi-year highs, as investors looked beyond a series of mixed earnings reports and disappointing GDP and jobless claims reports.

“I think the stock market, more than anything, is reacting to the earnings reports,” said Wyss. Ahead of Friday’s opening bell, Dow components Caterpillar (CAT, Fortune 500) and Merck (MRK, Fortune 500) reported better-than-expected earnings.

Merck’s quarterly profit tripled, on strong drug sales, while Caterpillar benefited from strong demand for bulldozers and other machinery. Shares of Merck edged up 1.5%, while Caterpillar’s stock rose nearly 3%.

Chevron (CVX, Fortune 500) is also slated to deliver quarterly results before the bell. Analysts forecast Chevron will post a profit of $3 per share.

Companies: Late Thursday, Microsoft reported a 31% surge in quarterly profit, on strong Office and Kinect sales. But not all the news was good, as netbook sales fell 40%.

Microsoft’s (MSFT, Fortune 500) stock slipped 1% in premarket trading.

Research in Motion on Thursday cut its forecast for the current quarter, citing sluggish Blackberry sales. RIM’s (RIMM) stock price fell nearly 12% in premarket trading.

Economy: Before the start of trading, investors will digest data on personal income and spending. Economists polled by Briefing.com expect spending to increase to 0.5%, and income to rise 0.4% in March.

Currencies and commodities: The dollar fell against the euro, the Japanese yen and the British pound.

Oil for June delivery were flat at $112.86 a barrel.

Gold futures for June delivery hit an intraday high of $1,541 per ounce early on Friday, then backed off to $1,536.70 an ounce.

Wyss said that gold prices are benefiting from weakness in the dollar.

“You have to put your money somewhere,” he said. “Right now people are afraid because of low interest rates and unsustainable budget deficits.”

Bonds: The price on the benchmark 10-year U.S. Treasury slipped, pushing up the yield slightly to 3.32%.

World markets: On Friday, the London Stock Exchange was closed for the royal wedding.

European markets gained in morning trading. The DAX in Germany added 0.2% and France’s CAC 40 rose 0.6%.

Asian markets ended the session mixed. The Shanghai Composite rose 0.8%, while the Hang Seng in Hong Kong slipped 0.4%. Japan’s Nikkei was closed for holiday. To top of page

First Published: April 29, 2011: 6:30 AM ET

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Stocks: Focus on earnings, gold and dollar