Bargain Hunting May Contribute To Initial Strength On Wall Street

Stocks moved sharply lower last week but are likely to move back to the upside in early trading on Monday. The major index futures are currently pointing to a higher open for the markets, with the S&P 500 futures up by 0.6 percent.

Traders may look to pick up stocks at reduced levels following the steep drop seen last week, which reflected ongoing concerns about the outlook for interest rates and the conflict in the Middle East.

The Dow slumped to its lowest closing level in seven months last Friday, while the S&P 500 slid to a new five-month closing low.

Overall trading activity may be somewhat subdued, however, as some traders may stick to the sidelines ahead of the Federal Reserve’s monetary policy announcement on Wednesday.

With the Fed widely expected to leave interest rates unchanged, traders will pay close attention to the accompanying statement for clues about the potential for further rate hikes.

Following the Fed announcement, the Labor Department’s closely watched monthly employment report is likely to move into the spotlight later in the week.

After moving sharply lower over the two previous sessions, the major U.S. stock indexes turned in a mixed performance during trading on Friday. While the Dow and the S&P 500 extended the recent downward move, the tech-heavy Nasdaq managed to regain some ground.

The Nasdaq pulled back well off its best levels of the day but still closed up 47.41 points or 0.4 percent at 12,643.01, bouncing off its lowest closing level in five months.

Meanwhile, the Dow tumbled 366.71 points or 1.1 percent to 32,417.59 and the S&P 500 fell 19.86 points or 0.5 percent to 4,117.37.

Despite the mixed performance on the day, the major averages all moved sharply lower for the week. The Dow tumbled by 2.1 percent, while the S&P 500 and the Nasdaq plunged by 2.5 percent and 2.6 percent, respectively.

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Monday. Japan’s Nikkei 225 Index slumped by 1.0 percent, while China’s Shanghai Composite Index inched up by 0.1 percent.

Meanwhile, the major European markets have all moved to the upside on the day. While the German DAX Index has climbed by 0.5 percent, the French CAC 40 Index and the U.K.’s FTSE 100 Index are both up by 0.7 percent.

In commodities trading, crude oil futures are tumbling $1.59 to $83.95 a barrel after surging $2.33 to $85.54 a barrel last Friday. Meanwhile, after inching up $1.10 to $1,998.50 an ounce in the previous session, gold futures are rising $10.10 to $2,008.60 an ounce.

On the currency front, the U.S. dollar is trading at 149.84 yen versus the 149.66 yen it fetched at the close of New York trading on Friday. Against the euro, the dollar is trading at $1.0587 compared to last Friday’s $1.0565.

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