Wall Street headed higher ahead of economic indicators in Canada and U.S.

TORONTO – A suggestion by a U.S. Federal Reserve member that the central bank should consider ending its monthly US$85-billion bond purchases on signs of a recovery in the housing market seemed to have little effect on U.S. stock futures Friday.

The Dow Jones industrial futures was ahead by 38 points to 15,250, the S&P 500 futures index jumped 4.60 points to 1,652.70, while the Nasdaq futures climbed 7.5 points to 3,005.75.

The Canadian dollar fell 0.83 of a cent to 97.29 cents US.

The comments about quantitative easing from John Williams, president of the Federal Reserve’s San Francisco branch, sparked a minor sell-off in the markets late Thursday and left all the indexes closing in negative territory.

At one time, evidence of a recovering U.S. economy would have a positive effect on financial markets. But at the moment , investors believe the current rally has been mostly driven by easy monetary policy so ending it would likely trigger a pullback in stocks.

By Friday, it seemed like all had been forgotten as traders prepared to digest a number of economic reports in Canada and the U.S.

Statistics Canada reported that consumer prices rose at the slowest rate since October 2009 last month, as the annual inflation rate dipped six-tenths of a point to 0.4 per cent.

The agency says there was also an outward decline month-to-month, with prices dropping 0.4 per cent from March. While many consumer items saw an outright decline in prices from a year ago, the agency says the biggest contributor was gasoline, which fell six per cent from last April. The figures came in below economists’ expectations.

The Bank of Canada’s core inflation index, which excludes volatile items such as gasoline, just managed to stay within the central bank’s desired one-to-three range, falling only three-tenths of a point to 1.1 per cent.

The latest wholesale trade figures for Canada will also be released later in the day.

In the U.S., the Conference Board will have its index of leading indicators, considered a gauge of jobs, building permits and other financial indicators. The University of Michigan and Thomson Reuters will also release its consumer sentiment report.

Analysts hope the figures will balance out several discouraging economic reports released Thursday, including a jump in unemployment aid applications to their highest level in six weeks.

The news came as Wal-Mart Stores Inc., Nordstrom, and J.C. Penney reported disappointing earnings, a possible sign that consumers are starting to spend less in account of higher Social Security taxes that kicked in earlier this year. Personal computer maker Dell also posted dismal first-quarter earnings.

Meanwhile, gold prices continued to pull back. June gold bullion dropped $11.50 to US$1,375.40 an ounce, down nearly five per cent this week. On Wednesday, it closed under $1,400 an ounce for the first time in a month.

The June crude contract was up 59 cents to US$95.75 a barrel and July copper climbed four cents to US$3.33 a pound.

Overseas, Britain’s FTSE 100 rose 0.3 per cent to 6,704.57. Germany’s DAX climbed the same amount to 8,392.18. France’s CAC-40 was up 0.2 per cent to 3,986.56.

Earlier in Asia, Japan’s Nikkei 225 index rose 0.7 per cent to close at 15,138.12, reversing a lower open. Australia’s S&P/ASX 200 added 0.3 per cent to 5,180.80, pushed up by gains in BHP Billiton, the world’s largest mining company. The stock rose 1.9 per cent on bargain-hunting.

Benchmarks in mainland China and Indonesia also rose while those in Taiwan, India, Singapore, New Zealand and the Philippines fell. Markets in Hong Kong and South Korea were closed for public holidays.