U.S. Stocks May Show A Lack Of Direction In Early Trading
Following the downturn 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 down by just 11 points.
Traders may be reluctant to make significant moves amid uncertainty about the near-term outlook for the markets following the downward trend seen over the past several sessions.
The Dow ended the previous session at its lowest closing level in almost two months, while the tech-heavy Nasdaq closed lower for four straight session.
Trading could be impacted by reaction to a report from the Federal Reserve on industrial production in the month of August, which is due just before the start of trading. Industrial production is expected to increase by 0.5 percent.
Meanwhile, traders may look ahead to upcoming reports on retail sales and consumer sentiment as well as next week’s Fed meeting.
The futures did not show much reaction to a report from the Labor Department unexpectedly showing a decrease in U.S. import prices in the month of August.
The Labor Department said import prices fell by 0.3 percent in August after climbing by an upwardly revised 0.4 percent in July.
The drop surprised economists, who had expected import prices to rise by 0.3 percent, matching the increase originally reported for the previous month.
Meanwhile, the report said export prices increased by 0.4 percent in August after jumping by a downwardly revised 1.1 percent in July.
Economists had expected export prices to advance by 0.5 percent compared to the 1.3 percent surge originally reported for the previous month.
A separate report from the New York Fed showed an unexpected rebound in the pace of growth in regional manufacturing activity in the month of September.
Stocks moved to the upside at the start of trading on Tuesday but came under pressure over the course of the session. The major averages pulled back well off their early highs and slid firmly into negative territory as the day progressed.
After snapping a five-session losing streak on Monday, the Dow slid 292.06 points or 0.8 percent to 34,577.57, its lowest closing level in almost two months. The S&P 500 fell 25.68 points or 0.6 percent to 4,443.05, while the Nasdaq dropped 67.82 points or 0.5 percent to 15,037.76, closing lower for the fifth straight session.
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Wednesday. Japan’s Nikkei 225 Index fell by 0.5 percent, while China’s Shanghai Composite Index edged down by 0.2 percent.
The major European markets have also moved to the downside on the day. While the French CAC 40 Index has slid by 0.7 percent, the German DAX Index and the U.K.’s FTSE 100 Index are down by 0.2 percent and 0.1 percent, respectively.
In commodities trading, crude oil futures are jumping $1.26 to $71.72 a barrel after inching up $0.01 to $70.46 a barrel on Tuesday. Meanwhile, an ounce of gold is trading at $1,803.40, down $3.70 compared to the previous session’s close of $1,807.10. On Tuesday, gold climbed $12.70.
On the currency front, the U.S. dollar is trading at 109.36 yen compared to the 109.69 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is trading at $1.1814 compared to yesterday’s $1.1803.
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