RTTNews - After a mild pullback in the previous session, stocks are looking to extend recent weakness Tuesday morning ahead of key housing price and consumer confidence data due out later this morning. The major index futures are currently all in negative territory, with the Dow futures down 20 points.
Some of the downward momentum comes on the heels of the latest round of nuclear tests by North Korea and the almost certain prospect of auto icon General Motors (GM) entering bankruptcy this week.
The S&P/Case-Shiller home price index, which tracks monthly changes in the value of residential real estate in 20 metropolitan regions across the U.S., is scheduled to be released at 9 a.m. ET. Economists expect an 18.4 percent year-over-year decline in the 20-city composite house price index for March.
Additionally, the Conference Board is scheduled to release its consumer confidence report for May at about 10 a.m. ET. The report, which is based on a survey of 5,000 U.S. households, is expected to show that the consumer confidence index rose to 42 in May.
The U.N. Security Council strongly condemned North Korea's carrying out of its second nuclear test in defiance of international warnings and triggering a new crisis in the Korean peninsula.
The council said the nuclear test was a clear violation of existing council resolutions, and in an unanimous statement adopted just hours after Monday's nuclear test, its members decided to begin work immediately on a new resolution.
In corporate news, automaker General Motors may be placed in bankruptcy protection by the U.S. government this week.
Under the tentative bankruptcy plan, GM could receive just short of $30 billion in additional federal loans, pushing the government's investment in the automaker to nearly $45 billion. The capital injection is reportedly a starting point in discussions and could be modified.
Meanwhile, Canadian Auto Workers members voted in favor of a new cost-cutting deal with General Motors, a key condition for the automaker to receive billions in government loans from Canada and Ontario.
In other news, Rio Tinto (RTP), the Anglo-Australian mining group, agreed Tuesday to a 33-44 percent cut in iron ore prices with Japan's Nippon Steel Corp. (NISTY.PK) for the contract year commencing April 1, 2009, which is reportedly the first price cut in seven years.
The price cuts reflect the worldwide slump in demand amid the economic recession. The Chinese are expected to drive an even harder bargain.
U.S. stocks closed Friday's quiet session little changed as traders hesitated to take positions ahead of the long Memorial Day weekend. Bargain hunting drove gains into the late afternoon, but the major averages pulled back into negative territory going into the close.
Despite the losses on Friday, the major averages managed to post modest gains for the week due largely to the rally seen last Monday. The Dow edged up 0.1 percent for the week, while the Nasdaq and the S&P 500 posted weekly gains of 0.7 percent and 0.5 percent, respectively.
In early commodities trading, crude oil futures are down $1.23 at $60.44 a barrel, while gold futures are also down, falling by $8.60 to $950.30 an ounce.
On the currency front, the U.S. dollar has gained some footing against the euro and is currently trading at $1.3917. The dollar set a fresh five-month low against the currency on Friday.
Meanwhile, against the pound, the dollar also gained some traction, reaching $1.5861 after dropping to a seven-month low against the pound on Friday. The dollar has moved to 94.94 against the yen after testing its March lows against the currency ahead of the long weekend.
In overseas trading, stock markets across the Asia-Pacific region finished mostly lower on Tuesday. Japan's benchmark Nikkei 225 Index slipped 0.4 percent, while Hong Kong's Hang Seng Index fell 0.8 percent.
The major European markets are also seeing some weakness. The French CAC 40 Index and the German DAX Index are down by 1.2 and 1.3 percent, respectively, while the U.K.'s FTSE 100 Index is falling by 0.6 percent.
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