U.S. Stocks May Regain Ground After Yesterday’s Weakness

Australian dollars in Sydney, Friday, Jan. 15, 2016. (AAP Image/Joel Carrett) NO ARCHIVING

Stocks are likely to move mostly higher in early trading on Wednesday, regaining ground after coming under pressure late in the previous session. The major index futures are currently pointing to a higher open for the markets, with the Dow futures up by 115 points.

The markets are likely to benefit from an early advance by shares of Intel (INTC), with the semiconductor giant spiking by 3.6 percent in pre-market trading.

The jump by Intel comes after CEO Pat Gelsinger outlined the company’s path forward to manufacture, design and deliver leadership products and create long-term value for stakeholders.

Gelsinger announced significant manufacturing expansion plans, including building two new factories in Arizona. He said Intel also plans to become a major provider of foundry capacity in the U.S. and Europe to serve customers globally.

Buying interest may also be generated in reaction to the recent stabilization in bond yields, which have pulled back after reaching their highest levels in over a year last week.

Yields on ten-year notes and thirty-year bonds are moving modestly lower this morning following the notable downward move seen over the two previous sessions.

However, the early buying interest may be partly offset by a report from the Commerce Department showing an unexpected decrease in durable goods orders in the month of February.

The Commerce Department said durable goods orders slumped by 1.1 percent in February after spiking by an upwardly revised 3.5 percent in January.

The pullback came as a surprise to economists, who had expected durable goods orders to climb by 0.8 percent compared to the 3.4 percent jump that had been reported for the previous month.

Excluding a steep drop in orders for transportation equipment, durable goods orders still fell by 0.9 percent in February after surging up by 1.6 percent in January. Economists had expected a 0.6 percent increase.

The data follows the recent release of disappointing reports on retail sales, industrial production and home sales, potentially raising concerns about the pace of the economic recovery.

Shortly after the start of trading, Federal Reserve Chair Jerome Powell and Treasury Secretary Janet Yellen are scheduled to testify before the Senate Banking Committee.

Stocks showed a lack of direction throughout much of the trading day on Tuesday but showed a notable move to the downside in the latter part of the session. The major averages all slid firmly into negative territory.

The major averages ended the session near their worst levels of the day. The Dow slumped 308.05 points or 0.9 percent to 32,423.15, the Nasdaq tumbled 149.85 points or 1.1 percent to 13,227.70 and the S&P 500 slid 30.07 points or 0.8 percent to 3,910.52.

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Wednesday. Japan’s Nikkei 225 Index plunged by 2 percent, while China’s Shanghai Composite Index tumbled by 1.3 percent.

The major European markets have also moved to the downside on the day. While the German DAX Index has fallen by 0.6 percent, the French CAC 40 Index and the U.K.’s FTSE 100 Index are both down by 0.3 percent.

In commodities trading, crude oil futures are jumping $1.53 to $59.29 a barrel after plummeting $3.80 to $57.76 a barrel on Tuesday. Meanwhile, an ounce of gold is trading at $1,731.10, up $6 compared to the previous session’s close of $1,725.10. On Tuesday, gold slid $13.

On the currency front, the U.S. dollar is trading at 108.69 yen compared to the 108.59 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is trading at $1.1828 compared to yesterday’s $1.1849.

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