U.S. Stocks May Move Back To The Upside In Early Trading
After ending the previous session sharply lower, stocks may move back to the upside in early trading on Tuesday. The major index futures are currently pointing to a higher open for the markets, with the Dow futures up by 141 points.
The markets may benefit from bargain hunting, as traders look to pick up stocks at reduced levels following the steep drop seen on Monday.
The tech-heavy Nasdaq ended yesterday’s session at its lowest closing level in over three months, while the S&P 500 dropped to a more than two-month closing low.
Concerns about inflation and the Federal Reserve tapering its asset purchases continued to weigh on the markets along with an increase in treasury yields.
On the U.S. economic front, a report released by the Commerce Department showed the U.S. trade deficit widened by much more than expected in the month of August.
The Commerce Department said the trade deficit widened to $73.3 billion from a revised $70.3 billion in July.
Economists had expected the trade deficit to increase to $70.5 billion from the $70.1 billion originally reported for the previous month.
The wider trade deficit came as the value of imports jumped by 1.4 percent to $287.0 billion, while the value of exports rose by 0.5 percent to $213.7 billion.
Shortly after the start of trading, the Institute for Supply Management is scheduled to release its report on activity in the service sector in the month of September.
The ISM’s services PMI is expected to slip to 60.0 in September from 61.7 in August, although a reading above 50 would still indicate growth in the sector.
U.S. stocks ended sharply lower on Monday after languishing in negative territory throughout much the day’s session.
High commodity prices, a surge in Treasury yields, worries about growth and rising inflation rendered the mood bearish.
Among the major averages, the Dow, which plunged to 33,821.58 a little before noon, ended with a loss of 323.54 points or 0.9 percent at 34,002.92.
The S&P 500 settled with a loss of 56.58 points or 1.3 percent at 4,300.46, while the tech-heavy Nasdaq closed with a loss of 311.21 points or 2.1 percent at 14,255.48, more than 70 points off the session’s low of 14,181.69.
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Tuesday. Japan’s Nikkei 225 Index tumbled by 2.2 percent, while South Korea’s Kospi slumped by 1.9 percent.
Meanwhile, the major European markets have moved to the upside on the day. While the French CAC 40 Index has advanced by 0.8 percent, the U.K.’s FTSE 100 Index is up by 0.6 percent and the German DAX Index is up by 0.4 percent.
In commodities trading, crude oil futures are jumping $0.89 to $78.51 a barrel after spiking $1.74 to $77.62 a barrel on Monday. Meanwhile, after climbing $9.20 to $1,767.60 an ounce in the previous session, gold futures are falling $6.50 to $1,761.10 an ounce.
On the currency front, the U.S. dollar is trading at 111.22 yen compared to the 110.93 yen it fetched at the close of New York trading on Monday. Against the euro, the dollar is valued at $1.1599 compared to yesterday’s $1.1621.
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