Friday On My Mind: Stocks Poise To Fall As Anxieties Resume

If Thursday was supposed to be the calm, Friday isn’t quite living up to some expectation of a storm. Folks on Wall Street might find they’ve gotten a little wet. But, at least on the open, it doesn’t look like they’re going to get doused.

In Thursday’s trading, the headwinds that caused equities to falter over the previous week largely reversed themselves. Energy prices stopped falling. Raw materials moved up, not down.Risk-averse traders stopped piling into safe havens like Treasuries and the dollar. Equity investors eschewed defensive issues in health care and consumer products in favor of materials and banks.

These weren’t seismic changes. More evolutionary than revolutionary. And equity buyers clearly didn’t believe they had much endurance, because market averages staged one of those classic ”barely budged” trading days: the S&P 500 (GSPC)rose 3 points, or three-tenths of one percent. TheDow Jones Industrial Average (DJI)increased 4 points, or six-hundredths – that’s two places behind the zero – of one percent.

It turns out that equity traders were right to be suspicious.Here on Friday, crude prices took another slide, piercing the $60 a barrel level to the downside. Treasuries have traded higher once again as risk-averse traders sought safe havens. Shares of Merck (MRK)head for gains.

Of course, given how tentative most of the trends have seemed – energy prices being the exception, since the 14% decline in crudethis month looks pretty convincing – it’s not surprising that the declines forecast for Friday have looked rather tentative. The S&P 500 futures have suggested a 7-point decline on the open. Losses could mount as the session wears on, especially if investorshear the siren song of the open road, amid the sparkling weather (at least, between Wall Street and the Hamptons) and decide to leave the market to its own trends.

Ne xt week holds promise of a little more action, a few morecatalysts, than has been the case thus far in July. Maybe investors will wait for something to trade off.