Stocks are likely to move to the upside in early trading on Wednesday, regaining ground after ending the previous session sharply lower. The major index futures are currently pointing to a higher open for the markets, with the Dow futures up by 125 points.
Bargain hunting may contribute to an early rebound on Wall Street, as traders pick up stocks at relatively reduced levels following yesterday’s sell-off.
The tech-heavy Nasdaq saw its worst day since March on Tuesday, ending the session at its lowest closing level in over a month. The S&P 500 also tumbled to a two-month closing low.
A pullback by treasury yields may also generate some buying interest, with the ten-year yield moving modestly lower after ending the previous session at its highest closing level in three months.
Indications the Federal Reserve plans to begin scaling back its asset purchases in the near future has contributed to a recent spike in yields, which move opposite of bond prices.
Not long after the start of trading, the National Association of Realtors is scheduled to release its report on pending home sales in the month of August. Pending home sales are expected to jump by 1.3 percent.
A pending home sale is one in which a contract was signed but not yet closed. Normally, it takes four to six weeks to close a contracted sale.
Following the mixed performance seen on Monday, stocks moved sharply lower during trading on Tuesday. With the steep drops on the day, the Nasdaq and the S&P 500 fell to their lowest closing levels in one and two months, respectively.
The major averages all finished the day firmly in negative territory. The Dow tumbled 569.38 points or 1.6 percent to 34,299.99, the Nasdaq plunged 423.29 points or 2.8 percent to 14,546.68 and the S&P 500 slumped 90.48 points or 2 percent to 4,352.63.
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Wednesday. Japan’s Nikkei 225 Index plummeted by 2.1 percent, while China’s Shanghai Composite Index dove by 1.8 percent.
Meanwhile, the major European markets have moved to the upside on the day. While the French CAC 40 Index has jumped by 1 percent, the German DAX Index and the U.K.’s FTSE 100 Index are both up by 0.9 percent.
In commodities trading, crude oil futures are slipping $0.30 to $74.99 a barrel after edging down $0.16 to $75.29 a barrel on Tuesday. Meanwhile, an ounce of gold is trading at $1,739.20, up $1.70 compared to the previous session’s close of $1,737.50. On Tuesday, gold slid $14.50.
On the currency front, the U.S. dollar is trading at 111.54 yen compared to the 111.50 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is trading at $1.1644 compared to yesterday’s $1.1683.
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