The major U.S. index futures are pointing to a slightly lower opening on Tuesday following the modest strength seen in the previous session.
Profit taking may lead to initial weakness on Wall Street after two days of gains, although trading activity may be somewhat subdued.
Traders may stick to the sidelines ahead of Federal Reserve Chair Janet Yellen’s semiannual testimony before Congress in the coming days.
Stocks moved modestly higher over the course of the trading session on Monday after initially showing a lack of direction. While the Dow ended the day roughly flat, the broader Nasdaq and S&P 500 closed in positive territory.
The Dow edged down 5.82 points or less than a tenth of a percent to 21,408.52, but the Nasdaq climbed 23.31 points or 0.4 percent to 6,176.39 and the S&P 500 inched up 2.25 points or 0.1 percent to 2,427.43.
Traders seemed somewhat reluctant to make more significant moves ahead of Yellen’s congressional testimony.
Yellen is due to testify before the House Financial Services Committee on Wednesday and before the Senate Banking Committee on Thursday.
The comments from the Fed Chief could have a significant impact on the outlook for interest rates ahead of the central bank’s monetary policy meeting later this month.
Remarks by several other Fed officials may also attract attention this week along with reports on retail sales, industrial production and producer and consumer prices.
The roughly flat close by the Dow came as a steep drop by shares of Wal-Mart (WMT) offset strong gains by Nike (NKE) and Visa (V).
Gold stocks showed a significant move to the upside on the day, driving the NYSE Arca Gold Bugs Index up by 2.8 percent. The index bounced off its lowest closing level in six months. The rebound by gold stocks came amid an increase by the price of the precious metal.
Considerable strength was also visible among steel stocks, as reflected by the 1.7 percent advance by the NYSE Arca Steel Index. Cliffs Natural Resources (CLF) and Gerdau (GGB) posted standout gains.
Energy stocks also turned in a strong performance, moving higher along with the price of crude oil. Semiconductor and internet stocks also saw some strength on the day, while notable weakness was visible among biotechnology stocks.
Commodity, Currency Markets
Crude oil futures are sliding $0.38 to $44.02 a barrel after inching up $0.17 to $44.40 a barrel on Monday. Meanwhile, after climbing $3.50 to $1,213.20 an ounce in the previous session, gold futures are slipping $2.80 to $1,210.40 an ounce.
On the currency front, the U.S. dollar is trading at 114.37 yen compared to the 114.04 yen it fetched at the close of New York trading on Monday. Against the euro, the dollar is valued at $1.1408 compared to yesterday’s $1.1399.
Asian stocks followed Wall Street and Europe higher on Tuesday as investors awaited cues from the U.S. corporate earnings season as well as Federal Reserve Chair Janet Yellen’s semi-annual testimony before Congress on Wednesday and Thursday.
Japanese shares rose to finish near two-week highs as the dollar hit a four-month high versus the yen, helping bolster exporters’ shares. Tech shares also witnessed good buying following the strong Nasdaq performance overnight.
The Nikkei 225 Index climbed 114.50 points or 0.6 percent to 20,195.48, the highest level since June 29th. The broader Topix Index closed 0.7 percent higher at 1,627.14.
Toyota, Panasonic and Sony rallied 1-3 percent. Suzuki Motor dropped 1.8 percent after Reuters reported that Dutch prosecutors will investigate possible misuse of vehicle emissions software by the automaker.
Australian shares ended marginally higher, led by miners and banks. The benchmark S&P/ASX 200 Index inched up 4.50 points or 0.1 percent to 5,728.90 in thin trading, while the broader All Ordinaries Index closed 5.60 points or 0.1 percent higher at 5,768.50.
BHP Billiton advanced 1.1 percent, Rio Tinto gained 0.8 percent and Fortescue Metals Group rallied 3.5 percent after iron ore futures on the Dalian Commodity Exchange rose for a third straight day.
The big four banks rose between 0.1 percent and 0.7 percent, while regional lenders Bendigo and Bank of Queensland ended up more than 1 percent each. Energy stocks closed mixed even as oil held gains above $44 a barrel.
Metcash climbed 2.9 percent after appointing former Tesco executive Jeff Adams as its new CEO. Slater & Gordon jumped 9.5 percent after settling an investor class action suit against itself.
The day’s economic reports proved to be a mixed bag, with home loans returning to growth for the first time in four months in May and National Australia Bank’s widely watched monthly business survey showing a marginal improvement in June, while the ANZ- Roy Morgan consumer confidence index weakened during the week ended July 9th.
Meanwhile, Chinese stocks ended slightly lower amid selling in small-cap stocks on concerns over tight liquidity conditions. The benchmark Shanghai Composite Index dropped 9.45 points or 0.3 percent to 3,203.18, although Hong Kong’s Hang Seng Index jumped 377.58 points or 1.5 percent to 25,877.64.
European stocks have given up early gains to turn mostly lower on Tuesday as investors gear up for the U.S. earnings season and looked ahead to testimony from Fed chair Janet Yellen this week for clues on the timing of the next U.S. rate hike.
While the German DAX Index is up by 0.2 percent, the French CAC 40 Index is down by 0.3 percent and the U.K.’s FTSE 100 Index is down by 0.8 percent.
Adecco shares have come under pressure after analysts at Deutsche Bank cut their rating on the Swiss staffing firm.
Pearson shares have plunged as the British publishing and education company announced an agreement to sell a 22 percent stake in the Penguin Random House Venture.
Retailer Marks & Spencer Group has also tumbled after reporting a decline in quarterly sales on a like-for-like basis, weighed down by its troubled clothing business.
On the other hand, Danish insurer Tryg has climbed after its second quarter profit beat estimates. JCDecaux has also moved higher on news the French outdoor advertising firm has bagged the 10-year exclusive advertising concession for the Sao Paulo Guarulhos international airport.
German travel and tourism firm TUI has advanced after selling its remaining 8.5 million shares in Hapag-Lloyd for 244.4 million euros.
U.S. Economic Reports
At 10 am ET, the Commerce Department is scheduled to release its report on wholesale inventories in the month of May. Wholesale inventories are expected to rise by 0.3 percent.
Federal Reserve Governor Lael Brainard is due to be the keynote speaker at the Conference on Normalizing Central Banks’ Balance Sheets in New York City at 12:30 pm ET.
At 1 pm ET, the Treasury Department is scheduled to release the results of auction of $24 billion worth of three-year notes.
Minneapolis Fed President Neel Kashkari is due to speak at a moderated Q&A at the Minnesota Women’s Economic Roundtable event in Minneapolis at 1:20 pm ET.
Stocks In Focus
Shares of Arena Pharmaceuticals (ARNA) are moving sharply higher in pre-market trading after the biopharmaceutical company reported positive phase 2 results for its hypertension drug.
Biotechnology company Amicus Therapeutics (FOLD) may also see significant strength after the FDA informed the company it may now submit a new drug application for oral precision medicine migalastat for Fabry disease.
Rent-A-Center (RCII) is seeing pre-market strength on news the rent-to-own company rejected a takeover offer from Vintage Capital valuing the company at about $800 million.
Food and beverage giant PepsiCo (PEP) may be in focus after reporting second quarter results that exceeded analyst estimate on both the top and bottom lines.
Meanwhile, shares of Barracuda Networks (CUDA) are moving notably lower in pre-market trading after the cybersecurity company reported fiscal first quarter earnings that met estimates but provided disappointing guidance.
Business software developer Citrix Systems (CTXS) may also see early weakness after announcing CEO Kirill Tatarinov is leaving the company.
Shares of J.C. Penney (JCP) could also move to the downside after the department store chain announced that its CFO Edward Record is stepping down.
by RTT Staff Writer
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