Following the long holiday weekend, stocks are likely to move to the downside in early trading on Tuesday. The major index futures are currently pointing to a lower open for the markets, with the Dow futures down by 108 points.
Traders may look to cash in on recent strength in the markets amid lingering concerns about the outlook for the economy and interest rates.
The Dow ended last Friday’s trading at its highest closing level in over a month, while the Nasdaq and the S&P 500 also reached one-month closing highs.
A negative reaction to earnings news from Goldman Sachs (GS) may also weigh on the markets, with the financial giant slumping by 2.8 percent in pre-market trading.
The drop by shares of Goldman Sachs comes after the company reported fourth quarter earnings that missed analyst estimates.
On the other hand, shares of Morgan Stanley (MS) are seeing pre-market strength after the company reported better than expected fourth quarter earnings.
Potentially adding to the concerns about the economy, the New York Federal Reserve released a report showing a significant contraction in regional manufacturing activity in the month of January.
The New York Fed said its general business conditions plunged to a negative 32.9 in January from a negative 11.2 in December, with a negative reading indicating a contraction. Economists had expected the index to climb to a negative 4.5.
Stocks showed a significant turnaround over the course of the trading session on Friday, recovering from initial weakness to close mostly higher. The major averages climbed well off their early lows to end the day firmly positive.
The major averages showed a notable move to the upside in the final hour of trading. The Dow rose 112.64 points or 0.3 percent to 34,302.61, the Nasdaq advanced 78.05 points or 0.7 percent to 11,079.16 and the S&P 500 climbed 15.92 points or 0.4 percent to 3,999.09.
The gains on the day extended a recent upward trend, helping the major averages moved sharply higher for the week. The Nasdaq surged by 4.8 percent, while the S&P 500 and the Dow jumped by 2.7 percent and 2.0 percent, respectively.
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Tuesday. Japan’s Nikkei 225 Index shot up by 1.2 percent, while Hong Kong’s Hang Seng Index slid by 0.8 percent.
Meanwhile, the major European markets are little changed on the day. While the U.K.’s FTSE 100 Index is down by 0.1 percent, the German DAX Index and the French CAC 40 Index are roughly flat.
In commodities trading, crude oil futures are rising $0.27 to $80.13 a barrel after jumping $1.47 to $79.86 a barrel last Friday. Meanwhile, after surging $22.90 to $1,921.70 an ounce in the previous session, gold futures are sliding $8.70 to $1,913 an ounce.
On the currency front, the U.S. dollar is trading at 128.45 yen versus the 128.58 yen it fetched at the close of New York trading on Friday. Against the euro, the dollar is trading at $1.0849 compared to last Friday’s $1.0822.
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