After seeing substantial strength in the previous session, stocks are likely to give back some ground in early trading on Tuesday. The major index futures are currently indicating a modestly lower open, with the Dow futures down 21 points.

While profit taking may contribute to some initial weakness, if stocks are able to hang onto the bulk of Monday's standout gains, it will likely still be seen as a positive sign for the markets.

Nonetheless, trading is likely to be impacted by reaction to comments from Federal Reserve Chairman Ben Bernanke, who is due to testify before the Joint Economic Committee beginning at about 10 am ET.

Lawmakers are likely to grill the Fed Chairman about the results of the government's stress tests of the nation's largest financial institutions, which are set to be released on Thursday.

The release of the Institute for Supply Management's report on activity in the service sector in the month of April could also impact trading, with the index of activity in the sector expected to rise to 42.2 from 40.8 in March.

While a reading below 50 would indicate continued contraction in service sector activity, an increase would signal a slowdown in the pace of contraction.

On the corporate front, shares of Kraft Foods (KFT) are likely to be in focus after the food maker reported first quarter earnings that rose more than analysts had expected despite a bigger than expected decrease in revenues.

Kraft reported first quarter earnings that rose to $0.45 per share from $0.39 per share in the year-ago quarter even as its revenues for the quarter fell 6.5 percent to $9.4 billion. Analysts had expected the company to earn $0.40 per share on revenues of $9.67 billion.

Meanwhile, CVS Caremark (CVS) reported first quarter earnings that edged down to $0.50 per share from $0.51 per share a year ago on revenues that rose 12 percent to $23.39 billion. The drugstore operator reported adjusted earnings of $0.55 per share, a penny better than expected.

Additionally, shares of ASM International (ASMI) are moving sharply higher in pre-market trading after Intel's (INTC) global investment organization revealed that it plans to invest in ASMI through the purchase of 4 percent of its total common share capital.

Stocks moved sharply higher during trading on Monday, as traders reacted to the release of some better than expected economic data. The major averages extended the upward move seen last week, rising to multi-month closing highs.

After showing a strong upward move in morning trading, the major averages moved roughly sideways for much of the afternoon before seeing some further upside in late-day trading. The Dow eventually ended the session up more than 210 points.

With the gains, the Nasdaq ended the session at its best closing level in six-months, while the Dow and the S&P 500 set nearly four-month closing highs. The upward move also lifted the S&P 500 above the unchanged line for the year-to-date period.

Crude oil is trading down $0.35 at $54.12 a barrel after the commodity gained $1.27 to $54.47 a barrel in Monday's session. Meanwhile, gold futures, which ended the previous session up $14 at $902.20 an ounce, are currently up $9.60 at $911.80 an ounce.

On the currency front, the U.S. dollar is trading at 98.736 yen compared to the 98.79 yen it fetched at the close of New York trading on Monday. Against the euro, the dollar is valued at $1.3417 a euro.

In overseas trading, stock markets across the Asia-Pacific region closed mostly higher on Tuesday, although buying interest was somewhat subdued following the rally that was seen in the previous session. The Japanese market remained closed due to another national holiday.

The major European markets are turning in a mixed performance. While the U.K.'s FTSE 100 Index is playing catch up following yesterday's rally, rising 2.5 percent, the French CAC 40 Index and the German DAX Index are down 0.1 percent and 0.4 percent, respectively.

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