U.S. Stocks May Show A Lack Of Direction In Early Trading
Following the pullback seen in the previous session, stocks may show a lack of direction in early trading on Wednesday. The major index futures are currently pointing to a roughly flat open for the markets, with the Dow futures up by just 31 points.
A mixed batch of earnings news may lead to choppy trading on Wall Street as traders wait for the flood of corporate results due in the comings days.
Shares of Goldman Sachs (GS) are moving notably higher in pre-market trading after the investment bank reported third quarter results that blew past analyst estimates.
Health insurer UnitedHealth (UNH) may also see initial strength after reporting better than expected third quarter results and raising its full-year guidance.
On the other hand, shares of Bank of America (BAC) are likely to come under pressure after the financial giant reported third quarter earnings that beat analyst estimates but on weaker than expected revenues.
Banking giant Wells Fargo (WFC) may also move to the downside after reporting weaker than expected third quarter earnings, although its revenues came in above estimates.
Continued uncertainty about the passage a new stimulus bill may also keep traders on the sidelines, as Democrats and Republicans appear to be an impasse in negotiations over a new relief package.
On the U.S. economic front, the Labor Department released a report showing producer prices increased by more than expected in the month of September.
The Labor Department said its producer price index for final demand climbed by 0.4 percent in September after rising by 0.3 percent in August. Economists had expected prices to edge up by 0.2 percent.
The report said food prices jumped by 1.2 percent in September after decreasing by 0.4 percent in August, while energy prices fell by 0.3 percent after dipping by 0.1 percent.
Excluding food and energy prices, core producer prices still rose by 0.4 percent in September, matching the increase seen in the previous session. Core prices were also expected to inch up by 0.2 percent.
Stocks moved mostly lower during trading on Tuesday, giving back ground following the strong upward move seen in recent sessions. The Dow and the S&P 500 remained stuck in negative territory throughout the session, while the Nasdaq spent the day bouncing back and forth across the unchanged line.
The major averages all ended the day in the red, although the tech-heavy Nasdaq edged down just 12.36 points or 0.1 percent to 11,863.90. The Dow slid 157.71 points or 0.6 percent to 28,679.81 and the S&P 500 fell 22.29 points or 0.6 percent to 3,511.93.
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Wednesday. Japan’s Nikkei 225 Index inched up by 0.1 percent, while China’s Shanghai Composite Index fell by 0.6 percent.
Meanwhile, the major European markets have moved modestly lower on the day. While the U.K.’s FTSE 100 Index has dipped by 0.3 percent, the French CAC 40 Index is down by 0.2 percent and the German DAX Index is down by 0.1 percent.
In commodities trading, crude oil futures are inching up $0.02 to $40.22 a barrel after climbing $0.77 to $40.20 a barrel on Tuesday. Meanwhile, an ounce of gold is trading at $1,909.90, up $15.30 compared to the previous session’s close of $1,894.60. On Tuesday, gold plunged $34.30.
On the currency front, the U.S. dollar is trading at 105.15 yen compared to the 105.48 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is trading at $1.1764 compared to yesterday’s $1.1746.
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