RTTNews - After ending the previous week on a down note, stocks are poised to open notably lower on Monday as traders are questioning the fundamentals of the recent rally amid some disappointing economic reports. The major index futures are all in negative territory, with the Dow futures down by 166 percent.
The likely pullback comes after last week's disappointing consumer sentiment and retail sales data suggested that an economic recovery is further away than the markets had anticipated. Concerns about the outlook for the global economy contributed to considerable weakness in the overseas markets, with China's Shanghai Composite Index falling nearly 6 percent
Some negative sentiment has also been generated by news that Lowe's (LOW) reported second quarter net earnings of $0.51 per share compared to $0.63 per share in the same period last year. Wall Street expected the company to earn $0.54 per share for the quarter. The home improvement retailer also provided disappointing guidance.
Nonetheless, the futures have moved off their lows following the release of a report from the Federal Reserve Bank of New York showing that conditions for New York manufacturers improved for the first time in well over a year in the month of August.
The New York Fed said its general business conditions index rose to 12.1 in August from a negative 0.6 in July, with a positive reading indicating an expansion in the manufacturing sector. Economists had been expecting the index to increase more modestly to 3.0.
In other news, online broker Charles Schwab (SCHW) will likely be in focus after the company revealed that it would vigorously defend itself in court against allegations by New York Attorney General Andrew Cuomo concerning the company's sale of Auction Rate Securities, or ARS, to retail clients.
According to reports, China Investment Corp. is planning to pump around $2 billion into the U.S. mortgage system by hiring mandates under the U.S. Treasury-backed Public-Private Investment Plan or PPIP.
Stocks finished notably lower on Friday, although a late session rally helped to mitigate the pullback prompted by the day's disappointing economic data. The Dow closed down by 77 points at 9,321, the Nasdaq fell by 24 points to 1,986 and the S&P 500 slipped by 9 points to 1,004.
With the losses, the major averages all closed modestly lower for the week following four consecutive weekly gains. While the Dow fell 0.5 percent for the week, the Nasdaq and the S&P 500 posted weekly loses of 0.7 percent and 0.6 percent, respectively.
Crude oil futures are sliding in early commodities trading, falling to $65.99 a barrel after moving notably lower in the previous session. The price of gold is also under pressure, retreating by $13.70 to $933.90 an ounce.
On the currency front, the U.S. dollar is on the rise against the major European currencies, advancing to $1.4080 against the euro and climbing to $1.6323 versus the pound. The buck is little changed versus the yen, sitting at 94.60 yen.
In overseas trading, stock markets across the Asia-Pacific region finished considerably lower on Monday. Japan's benchmark Nikkei 225 Index slid by 3.1 percent, while Hong Kong's Hang Seng Index fell by 3.6 percent.
The major European markets are also moving lower, with the French CAC 40 Index and the German DAX Index both retreating by 1.9 percent, while the U.K.'s FTSE 100 Index is down by 1.7 percent.
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