After moving mostly higher over the course of the previous session, stocks are likely to give back some ground in early trading on Tuesday. The major index futures are currently pointing to a lower open, with the Dow futures down by 66 points.
The downward momentum for the markets is partly due to concerns about the outlook for global economic growth after an executive at mining giant BHP Billiton (BHP) cautioned that Chinese iron ore demand in flattening.
News that China is raising retail gasoline and diesel prices for the second time this year has also raised concerns about the outlook for growth in the world's second largest economy.
Additionally, the Commerce Department released a report showing an unexpected drop in U.S. housing starts in the month of February, although starts came in nearly in line with estimates due to an upward revision to the data for January.
The report showed that housing starts fell 1.1 percent to an annual rate of 698,000 in February from the revised January estimate of 706,000. Economists had expected starts to edge up to 700,000 from the 699,000 that had been reported for the previous month.
On the other hand, the report showed that building permits, an indicator of future housing demand, jumped 5.1 percent to an annual rate of 717,000 in February. With the increase, building permits reached their highest level in over three years.
Further housing data is scheduled to be released later this week, with traders likely to keep an eye on reports on new and existing home sales.
Among individual stocks, shares of Adobe Systems (ADBE) are likely to come under pressure in early trading after the design software developer reported first quarter earnings that fell year-over-year and provided disappointing second quarter earnings guidance.
Stocks moved mostly higher over the course of the trading day on Monday, extending the strong upward move seen last week. The markets continued to benefit from optimism about the economic outlook as well as some upbeat corporate news.
The major averages ended the day well off their highs for the session but closed in positive territory. The Dow edged up 6.51 points or 0.1 percent to 13,239.13, the Nasdaq climbed 23.06 points or 0.8 percent to 3,078.32 and the S&P 500 rose 5.58 points or 0.4 percent to 1,409.85.
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower on Tuesday, although the Japanese markets were closed for a public holiday. Hong Kong's Hang Seng Index fell by 1.1 percent, while Australia's All Ordinaries Index dropped by 0.4 percent.
The major European markets have also moved to the downside, pulling back further off their recent highs. While the U.K.'s FTSE 100 Index is down by 1.1 percent, the French CAC 40 Index and the German DAX Index are both down by 1.3 percent.
In commodities trading, crude oil futures are sliding $0.97 to $107.12 a barrel after ending the previous session up $1.03 at $108.09 a barrel. Gold futures, which rose $11.50 to $1,667.30 an ounce on Monday, are tumbling $21.50 to $1,645.80 an ounce.
On the currency front, the U.S. dollar is trading at 83.74 Japanese yen compared to the 83.35 yen it fetched at the close of New York trading on Monday. Against the euro, the dollar is valued at $1.3186 compared to yesterday's $1.3238.
by RTT Staff Writer
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