Stocks are likely to see some weakness in early trading on Tuesday, with the major index futures pulling back well below the unchanged line after seeing some strength earlier in the morning. The Dow futures are currently down 60 points.
After close of trading on Monday, some positive sentiment was generated by news from Goldman Sachs (GS), which reported a first quarter profit that rose year-over-year and came in well above analyst estimates, helped by strong revenue growth in its fixed income, currency and commodities businesses.
Goldman Sachs also said that it has commenced a $5 billion public offering of its common stock, which along with additional resources, may be used to repay TARP funds.
Additionally, Dow component Johnson & Johnson (JNJ) also released first quarter results that exceeded analyst estimates. The company posted earnings of $1.26 per share compared to the $1.22 per share that was anticipated.
However, the major index futures have turned lower following the release of a report from the Commerce Department showing an unexpected decrease in retail sales in the month of March.
The report showed that retail sales fell 1.1 percent in March following a revised 0.3 percent increase in February. Economists had expected sales to increase by 0.3 percent compared to the 0.1 percent decrease originally reported for the previous month.
The unexpected drop in retail sales was partly due to a 5.9 percent decrease in sales by electronics and appliance stores. Auto sales also showed a notable decrease for the month.
At the same time, the Labor Department said that its producer price index fell 1.2 percent in March compared to economist estimates of a flat reading. Core producer prices, which exclude food and energy prices, were unchanged compared to the previous month.
Additionally, the Commerce Department is scheduled to release its business inventories report for February at 10 AM ET. The report is expected to show a 1.2 percent decline in business inventories for the month.
After seeing considerable weakness in morning trading on Monday, stocks staged a notable recovery attempt over the course of the afternoon. The major averages moved well off their worst levels of the day, eventually ending the session mixed.
While the Nasdaq and the S&P 500 managed to finish the day above the unchanged line, the Dow closed down about 25 points. Nonetheless, the Dow was well off its low for the session, when it was down nearly 120 points.
Crude oil futures are rising $0.93 to $50.98 a barrel after declining $1.26 to $50.05 a barrel in Monday's session. Meanwhile, gold futures are falling $4.50 to $891.30 an ounce. In the previous session, the precious metal rose $12.50 to $895.80 an ounce.
On the currency front, the U.S. dollar is trading at 99.636 yen compared to the 100.0985 yen it fetched at the close of New York trading on Monday. Against the euro, the dollar is currently valued at $1.3242.
In overseas trading, stock markets across the Asia-Pacific region closed mostly higher on Tuesday, with financial leading the way higher following the release of the better than expected results from Goldman Sachs.
The major European markets are also seeing some strength, although they have pulled back well off their best levels of the day following the release of the disappointing U.S. retail sales data.
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