RTTNews - U.S. Stocks are set to open slightly higher Tuesday morning after bargain hunting at lower levels helped the major indices end mixed in the previous session. Traders are likely to remain cautious following the release of mixed economic readings, which stepped up concerns about the economy
As of 6.30 am ET, the Dow Futures were up 11 points, the S&P Futures were up 1.50 points, and the Nasdaq 100 futures were up 3.50 points.
Monday, stocks ended mixed following a late day rally, facilitated by bargain hunting at lower levels . Earlier, traders shrugged off a report from the Institute for Supply Management showing that activity in the service sector contracted for the ninth consecutive month in June, although at a slower pace than economists had been expecting.
The Nasdaq finished down by 9.12 points or 0.5% at 1,787, while the Dow closed up by 44.13 points or 0.5% at 8,325 and the S&P 500 rose by 2.30 points, or 0.3% to 899.
As the second quarter reporting season looms ahead, concerns over what companies have to say about their outlook should preoccupy the minds of traders. Additionally, the markets are also likely to look forward to the results of the Treasury auction of 3-year notes. Yesterday, an auction of 10-year TIPS by the Treasury saw strong demand, drawing an yield of 1.92% and a bid-to-cover ratio of 2.51.
Meanwhile, the heat is felt by the Obama administration, with the Vice President Joe Biden confessing that the administration misread the economy. He said in an interview that no one expected that the recovery package would in fact be in a position at this point after having distributed the bulk of the money.
Light sweet crude oil price for August delivery is currently gaining $0.34 and trading at $64.39, after having shed about $2.63 a barrel in the previous session to $64.05 a barrel on concerns about weak demand. The dollar is trading higher against the pound and is weakening against the Japanese yen as traders are toying with the idea of moving to safe heaven amid uncertain economic outlook.
The greenback is likely to see volatility amid the two-day G-8 meeting starting in Italy Thursday. Despite recent comments from China about an alternative international reserve currency, it is unlikely that the issue is mentioned in the communiqué to be released at the end of the meeting.
The European markets are trading in positive territory led by banking stocks and mining companies. The CAC-40 Index in France is up 0.69%, Germany's DAX Index is gaining 0.95% and the FTSE Index in the U.K is rising 0.87%.
In Europe, the Office for National Statistics in the U.K revealed that industrial production in the country unexpectedly dropped 0.6% in May from April. The report further noted that manufacturing output decreased 0.5% compared to previous month. Economists were looking for a monthly growth of 0.2% each for industrial as well as manufacturing output.
Citing results of its latest economic survey, the British Chamber of Commerce stated that the worst phase of the recession in the British economy is over. However, the Chamber cautioned that it is too early to say that the recovery is secure.
The major markets across Asia ended mixed amid cautious trading ahead of the earnings season in the U.S. While the markets in Australia, Japan, Hong Kong and China ended in negative territory, the other markets including India, Singapore, South Korea and Taiwan ended in positive territory.
In a central bank decision from the region, the Reserve Bank of Australia said it is retaining its cash rate at 3% for the third straight month. In its assessment of the economy, the Central Bank said that economic conditions in the country were not as weak as expected earlier. However, the bank foresees further decline due to sluggish capacity utilization and output coupled with weak demand for labor.
The International Monetary Fund or IMF raised its outlook for South Korea, saying that the stimulus measures implemented by the country's government helped to curb its economic downturn. The IMF now forecasts the economy to contract 3% this year, revised up from a 4% shrinkage it predicted in April.
For comments and feedback: contact firstname.lastname@example.org