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Profit Taking May Lead To Early Weakness On Wall Street - U.S. Commentary

After turning in a strong performance last week, stocks may give back some ground in early trading on Monday. The major index futures are currently pointing to a modestly lower open, with the Dow futures down by 21 points.

Profit taking is likely to contribute to any early weakness on Wall Street, with some traders likely to look to cash in on the recent strength in the markets.

Nonetheless, upbeat news from Apple (AAPL) may help to limit the downside for the markets, as the iPod and iPhone maker announced plans to initiate a dividend and a share repurchase program.

Apple said it plans to initiate a quarterly dividend of $2.65 per share sometime in the fourth quarter of fiscal 2012. The company's board also authorized a $10 billion share repurchase program commencing in fiscal 2013.

Trading could also be impacted by the release of a report from the National Association of Home Builders on homebuilder confidence in the month of March.

The NAHB/Wells Fargo Housing Market Index is expected to edge up to 30 in March after jumping to 29 in February, its highest level since May of 2007.

Housing data is likely to remain in focus throughout the week, with reports on housing starts and new and existing home sales also due to be released later in the week.

Peter Boockvar, managing director at Miller Tabak, said, "While we should see continued signs of bottoming, there is little question the very mild winter had a positive impact on both construction and foot traffic."

Stocks showed a lack of direction throughout the trading session last Friday, as traders seemed reluctant to make any significant moves following the recent rally. The markets eventually ended the choppy trading session nearly flat.

The major averages bounced back and forth across the unchanged line before finishing the session mixed. While the S&P 500 crept up 1.57 points or 0.1 percent to 1,404.17, the Dow slipped 20.14 points or 0.2 percent to 13,232.62 and the Nasdaq edged down 1.11 points or less than a tenth of a percent to 3,055.26.

Despite the mixed performance on the day, the major averages all showed strong upward moves for the week. The Dow and the S&P 500 both rose by 2.4 percent, while the Nasdaq climbed 2.2 percent.

In overseas trading, stock markets across the Asia-Pacific region turned in another mixed performance on Monday. Japan's Nikkei 225 Index edged up by 0.1 percent, while Hong Kong's Hang Seng Index tumbled by 1 percent.

Meanwhile, the major European markets have all moved to the downside on the day. While the U.K.'s FTSE 100 Index is down by 0.4 percent, the German DAX Index and the French CAC 40 Index are down by 0.7 percent and 0.8 percent, respectively.

In commodities trading, crude oil futures are climbing $0.34 to $107.40 a barrel after edging down $0.34 to $107.06 a barrel in the week ended March 16th. Meanwhile, gold futures, which fell $55.70 or 3.3 percent to $1,655.80 an ounce last week, are slipping $0.90 to $1,654.90 an ounce.

On the currency front, the dollar gained 1.2 percent against the Japanese yen last week before ending at 83.435 yen. Meanwhile, the greenback fell 0.3 percent against the euro to $1.3175. The U.S. dollar is currently trading at 83.27 yen and is valued at $1.3164 versus the euro.

by RTTNews Staff Writer

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