Stocks May Regain Ground In Early Trading – U.S. Commentary

After coming under pressure over the course of the previous session, stocks may regain some ground in early trading on Tuesday. The major index futures are currently pointing to a modestly higher open for the markets, with the Dow futures up by 27 points.

The markets may benefit from bargain hunting following the weakness seen in the technology sector over the past few days.

Positive sentiment may also be generated by a report from the Commerce Department showing personal income and spending both increased in line with economist estimates in the month of June.

The report said personal income climbed by 0.4 percent in June, matching the increase seen in May as well as expectations.

The Commerce Department said personal spending also rose by 0.4 percent in June after climbing by an upwardly revised 0.5 percent in May.

Economists had expected spending to increase by 0.4 percent compared to the 0.2 percent uptick originally reported for the previous month.

Overall trading activity may be somewhat subdued, however, as traders look ahead to the Federal Reserve’s money policy announcement Wednesday afternoon.

While the Fed is widely expected to leave interest rates unchanged, the accompanying statement is likely to be closely examined for any hints about future rate hikes.

Shortly after the start of trading, MNI Indicators is scheduled to release its report on Chicago-area business activity in the month of July.

The Chicago business barometer is expected to dip to 62.3 in July from 64.1 in June, although a reading above 50 would still indicate growth.

The Conference Board is due to release its report on consumer confidence in the month of July. The consumer confidence index is expected to inch up to 127.0 in July from 126.4 in June.

Stocks moved mostly lower over the course of the trading session on Monday, with technology stocks leading the way after seeing considerable weakness late last week. The tech-heavy Nasdaq pulled back further off the record closing high set last Wednesday.

The major averages all closed in negative territory, although the Nasdaq underperformed its counterparts. While the Nasdaq tumbled 107.42 points or 1.4 percent to 7,630.00, the Dow slid 144.23 points or 0.6 percent to 25,306.82 and the S&P 500 fell 16.22 points or 0.6 percent to 2,802.60.

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Tuesday. Japan’s Nikkei 225 Index close marginally higher, while Hong Kong’s Hang Seng Index fell by 0.5 percent.

The major European markets have also turned mixed on the day. While the German DAX Index has edged down by 0.2 percent, the French CAC 40 Index is up by 0.2 percent and the U.K.’s FTSE 100 Index is up by 0.7 percent.

In commodities trading, crude oil futures are falling $0.41 to $69.72 a barrel after spiking $1.44 to $70.13 a barrel on Monday. Meanwhile, after slipping $1.70 to $1,221.30 an ounce in the previous session, gold futures are inching up $0.20 to $1,221.50 an ounce.

On the currency front, the U.S. dollar is trading at 111.43 yen compared to the 111.04 yen it fetched at the close of New York trading on Monday. Against the euro, the dollar is valued at $1.1742 compared to yesterday’s $1.1706.

by RTTNews Staff Writer

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