U.S. Stocks May Extend Yesterday's Pullback In Early Trading

Following the pullback seen in the previous session, stocks may see further downside in early trading on Tuesday. The major index futures are currently pointing to a lower open for the markets, with the S&P 500 futures down by 0.3 percent.

Traders may continue to cash in on recent strength in the markets amid concerns optimism about the outlook for interest rates have led to overbought conditions.

While the Federal Reserve is widely expected to leave interest rates unchanged in the coming months, traders may need more evidence to solidify hopes of a rate cut in the near future.

The Labor Department’s closely watched monthly jobs report, which is due to be released on Friday, could have a significant impact on the outlook for rates.

Economists currently expect employment to increase by 185,000 jobs in November after rising by 150,000 jobs in October, while the unemployment rate is expected to hold at 3.9 percent.

Not long after the start of trading, the Institute for Supply Management is scheduled to release its report on service sector activity in the month of November.

The ISM’s services PMI is expected to inch up to 52.0 in November from 51.8 in October, with a reading above 50 indicating growth.

The Labor Department is also due to release its report on job openings in the month of October. Job openings are expected to decrease to 9.35 million in October after rising to 9.55 million in September.

Stocks showed a notable move to the downside in early trading on Monday, giving back ground after turning in a strong performance last Friday. The major averages subsequently climbed well off their worst levels but still ended the day in negative territory.

The Nasdaq slid 119.54 points or 0.8 percent to 14,185.49 and the S&P 500 fell 24.85 points or 0.5 percent to 4,569.78, while the narrower Dow edged down 41.06 points or 0.1 percent to 36,204.44 after falling more than 200 points early in the session.

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Tuesday. Japan’s Nikkei 225 Index slumped by 1.4 percent, while China’s Shanghai Composite Index tumbled by 1.7 percent.

Meanwhile, the major European markets are turning in a mixed performance on the day. While the U.K.’s FTSE 100 Index is down by 0.6 percent, the German DAX Index and the French CAC 40 Index are both up by 0.4 percent.

In commodities trading, crude oil futures are falling $0.57 to $72.47 a barrel after slumping $1.03 to $73.04 a barrel on Monday. Meanwhile, after plummeting $47.50 to $2,042.20 an ounce in the previous session, gold futures are inching up $4.10 to $2,046.30 an ounce.

On the currency front, the U.S. dollar is trading at 146.91 yen compared to the 147.21 yen it fetched at the close of New York trading on Monday. Against the euro, the dollar is valued at $1.0822 compared to yesterday’s $1.0836.

Source: Read Full Article