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Current Futures: Dow -10.00, S&P -3.10, NASDAQ -12.25

U.S. markets are currently trading side-ways after a report showed that the service side of the economy contracted at the slowest speed over the last few months in June. 

For now, the option market - which saw the VIX Index drop at the strongest pace since 1998 - seems to be right, as the U.S. market lacks any solid direction or trend. The VIX Index tracks the implied volatility of the S&P market by closely following the premium that traders request for selling options. As such, a falling VIX index means that investors think that volatility is slowing fading out of the market.

On Monday, the U.S. cash and futures markets traded on relatively weak momentum, even though the Asian and the European markets posted some decent gains. From the open of the Sunday session until now, the S&P futures moved only in a 9 point (or 1%) side-ways channel, which denotes the market’s lack of participants. The market traded in the red during the first part of the session, but recovered some parts of the declines after the ISM report showed that the service side of the economy contracted at the slowest pace over the previous nine months in June. TheLFB-Forex.com Trade Team said that investors might interpret this report as very bullish, since the ISM non-manufacturing reports gauge approximately 90% of the U.S. economy.

As expected, the raw material companies were the worst performers in the U.S. market, as crude oil declined on Monday for the fifth consecutive day. Moreover, the Baltic-Dry index, which tracks the costs of shipping raw materials, declined on Monday for the fourth consecutive day, as investors question the global recovery. Together with the commodity sector, the financial sector was among the worst performer in the U.S. market, after analysts have said that Bank of America might face a $7.6 billion loss from bad credits. Interestingly enough the same pattern was seen in the overnight markets, TheLFB-Forex.com Trade Team said.

The Dow Jones Index fell 1.44 points (0.02%) to 8,327.30, while the S&P 500 index declined 3.44 points (0.38%) to 892.98.

Crude oil for July delivery was recently trading at $64.10 per barrel, lower by $2.50. Oil declined as much as $3.30 on Monday, but retraced some of those declines throughout the U.S. session. 

Gold for July delivery was recently trading lower by $7.60 to $923.40. Most of the declines came during the early trading session, but since then gold has practically moved side-ways. 

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