RTTNews - After yesterday's lackluster showing, U.S. stocks are set to open on a cautious note, catalyzed by resilient Asian markets and a mixed showing by the European markets on the back of a commodity-rally. Crude oil futures are gaining ground and are trading near the $71-a-barrel level, as the dollar is weakening against most of its peers.
As of 6:30 am ET, the Dow futures are down 11 points, the S&P 500 futures are falling 1.40 points and the Nasdaq 100 futures are down 1.75 points.
The two-day FOMC meeting begins today, although a decision is not expected until Wednesday. The central bank is widely expected to hold the fed funds futures rate unchanged. However, the Fed's commentary on growth and inflation and any additional information on quantitative easing measures have the potential to move markets.
Traders may keep a close eye on the preliminary second quarter productivity and costs report, which is due to be released at 8:30 am. Productivity is expected to rise 5.5% along with a decline in unit labor costs.
Also on tap is the Commerce Department's wholesale inventories report that is expected to show a 0.8% decline in inventories at the end of June. The results of the 3-year Treasury note auction may also create some ripples in the markets.
In corporate news, engineering company, Fluor (FLR) reported Monday after the markets closed a decline in second quarter earnings compared to the year-ago period, which was boosted by a one-time gain. Revenues fell 8% to $5.29 billion, falling short of the mean analysts' estimate of $5.29 billion. However, the company maintained its 2009 earnings estimate.
Virtualization software maker VMware (VMW) announced a deal to buy privately held SpringSource, a specialist in open-source Java framework, for $362 million in cash.
Tellabs (TLAB) and Laboratory Corp. (LH) announced stock buybacks, while Bunge (BG) announced a common stock offering.
Sterlite Industries (SLT), a part of Vedanta Group, confirmed today that it is revising up its bid for U.S. copper miner Asarco, as it attempts to prevail against a competing bid from Grupo Mexico.
Applied Materials (AMAT), Bob Evans Farms (BOBE), Creek, Inc. (CREE), Learning Tree (LTRE) and Clear wire Corp. (CLWR) are among the companies scheduled to release their results after the markets close Tuesday.
The major U.S. averages traded below the unchanged line throughout Monday's session, as profit takers kept sentiment subdued. Resource, financial, retail, housing and airline stocks acted as drags on the overall market. While the Dow Industrials and the S&P 500 Index lost 0.34% and 0.33%, respectively, the Nasal Composite ended down 0.40%.
Asian stocks ended a volatile session on Tuesday on a high note, with most markets in the region shrugging off some initial weakness and advancing solidly in late trading. The Chinese Shanghai Composite Index snapped a four-session losing streak and closed up 0.46%, as traders digested a few key economic reports. Chinese fixed asset investments rose by a little less than expected in July, while trade figures from China showed declines in exports and imports, although the drops were not as severe as economists had expected.
The Japanese apple cart rode on, as the key Nikkei 225 average of the region advanced for the fourth straight session and ended at a 10-month closing high of 10,586, representing a gain of about 0.60%. Construction stocks gained ground on the prospects of seeing more construction activity following an earthquake that hit Asia.
Meanwhile, the Singapore market received ample support from a revised GDP report that showed a 20.7% sequential improvement in the second quarter. That said, the government said growth domestically hinges on a recovery in the U.S.
In two central bank decisions from the region, the Bank of Japan as well as the Bank of Korea announced a pause in their respective benchmark interest rates. Japan's interest rates are at 0.1%, while interest rate in Korea is at a record low 2%. The cautious optimism among these nations is due to the fact that they are heavily reliant on exports to Western nations, which are battling with one of the worst recessions in the post-war period.
European markets turned choppy after showing a buoyant mood in early trading. Currently, the French CAC 40 is showing a modest 0.02% gain, while German DAX Index is down 0.33% and the U.K. FTSE 100 Index is losing 0.16%.
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