RTTNews - After a considerable rally in the previous session, stocks are looking to open largely mixed on Tuesday, following worse than expected data on the health of the U.S. housing market, which dampened some appetite. Trading is likely to be sluggish as the major indices futures are on the opposite sides of the unchanged line, with the Dow futures down by 4 points.
Traders are digesting data from the U.S. Commerce Department that showed housing starts dropped 12.8 percent in April to an annual rate of 458,000 units. The result for March was revised to a rate of 525,000 units, a decline of 8.5 percent from the previous month.
Analysts had expected starts to rise to a pace of 540,000 units from the rate of 510,000 units that was originally reported for March.
Building permits, a measure of future home building, were also down, dropping 3.3 percent to an annual rate of 494,000 units.
A day after rival Lowe's (LOW) reported a better-than-expected profit and provided a more optimistic full-year forecast, home improvement retailer Home Depot Inc. (HD) reported higher first-quarter earnings. However, the bottom-line was helped by an easy comparison from last year, when one-time charges weighed on results.
On an adjusted basis, net earnings for the quarter were $587 million or $0.35 per share, compared to adjusted net earnings of $697 million or $0.41 per share for the same quarter in 2008. This beat the $0.29 per share that analysts were looking for.
Other key earnings on tap for the day will come from personal computer maker Hewlett-Packard Co. (HPQ). The firm will publish second quarter results after market closes on Tuesday, with analysts estimating earnings of $0.86 per share on revenues of $27.42 billion.
In other news, three major banks intend to repay funds borrowed under the government's TARP program, fueling speculation that the worst in the financial crisis might be nearing an end.
Financial service providers Goldman Sachs Group (GS), JPMorgan Chase (JPM) and Morgan Stanley (MS) have filed to repay the bail-out funds received under the TARP program in October. The three firms have received a total of about $45 billion in funds. American Express Co. (AXP), which received $3.4 billion, is also said to have filed for returning the funds last week.
American Express also announced Monday a series of cost cutting measures, including 4,000 job cuts, expected to produce cost benefits of about $800 million during the remainder of 2009.
Meanwhile, HSBC Holdings Plc (HBC, HSBA.L) and Bank of East Asia Ltd. reportedly received the approval of the Chinese government to issue yuan-denominated bonds in Hong Kong. The Chinese government's move is seen as part of its efforts to encourage the use of yuan as a reserve currency and reduce the role of the U.S. dollar.
In the previous session, the major indices finished prominently higher, with the Dow closing up 235.44 at 8504.08, the Nasdaq finishing up 52.22 at 1732.36, and the S&P 500 closing higher by 26.83 at 909.71.
In early commodities trading, crude oil futures are up $0.80 at $59.83 a barrel following a notable upward move on Monday, when oil rose $2.69 to $59.03 a barrel. Meanwhile, gold futures are currently up $3.10 at $924.80 an ounce, after ending the previous session down $9.60 to $921.70 an ounce.
On the currency front, the U.S. dollar has moved lower against the euro, slipping to 1.3626 while dropping to a five-month low of 1.5515 against the pound. Meanwhile, the buck inched lower against the yen, moving to 96.10 in early morning dealing in New York.
In overseas trading, stock markets across the Asia-Pacific region finished higher on Tuesday. Japan's benchmark Nikkei 225 Index rose by 2.7 percent, while Hong Kong's Hang Seng Index climbed 3.0 percent.
Meanwhile, the major European markets are also turning in a modestly strong performance. The French CAC 40 Index is up 0.3 percent, while the German DAX Index is also up, rising by 1.8 percent. The U.K.'s FTSE 100 Index is also gaining, up by 0.4 percent.
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