Stocks may show a lack of direction in early trading on Wednesday as traders express some uncertainty about the near-term outlook for the markets. The major index futures are currently pointing to a mixed open. While the Dow futures are up by 7 points, the Nasdaq futures are down by 1.5 points.
Traders may be reluctant to make any significant moves following the substantial advance seen over the past several months, which has lifted the major averages to multi-year highs.
While recent indicators have pointed to a continued recovery by the U.S. economy, some analysts believe the markets need to stage a temporary correction before they can see any further upside.
At the same time, traders have largely seemed hesitant to cash in on the recent gains amid concerns that stocks could leg up further on more upbeat data.
Housing data is likely to be in focus once again on Wednesday, with the National Association of Realtors scheduled to release its report on existing home sales in the month of February.
Economists expect existing home sales to edge up to an annual rate of 4.61 million in February after jumping 4.3 percent to a 4.57 million annual rate in January.
Among individual stocks, shares of Oracle (ORCL) may see early strength after the business software giant reported stronger than expected adjusted third quarter earnings amid a notable increase in new software license revenues. Oracle is up by 2.1 percent in pre-market trading.
Business uniform supplier Cintas (CTAS) may also move to the upside after reporting better than expected third quarter earnings and raising its full year earnings guidance above analyst estimates.
On the other hand, shares of Merck (MRK) and Ariad Pharmaceuticals (ARIA) may come under pressure in early trading after a FDA advisory panel rejected their experimental drug for the treatment of a rare but often deadly form of cancer.
With traders expressing renewed concerns about the outlook for the global economy, stocks moved mostly lower during trading on Tuesday. The markets ended the session well off their worst levels of the day, however, as selling pressure waned following an early downward move.
The major averages climbed well off their early lows but still closed in the red. The Dow fell 68.94 points or 0.5 percent to 13,170.19, the Nasdaq edged down 4.17 points or 0.1 percent to 3,074.15 and the S&P 500 slipped 4.23 points or 0.3 percent to 1,405.52.
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance on Wednesday. While Japan's Nikkei 225 Index ended the day down by 0.6 percent, China's Shanghai Composite Index crept up by 0.1 percent.
Meanwhile, the major European markets have all moved to the downside over the course of the trading day. The U.K.'s FTSE 100 Index has edged down by 0.1 percent, while the French CAC 40 Index and the German DAX Index are both down by 0.2 percent.
In commodities trading, crude oil futures are inching up $0.07 to $106.14 a barrel after tumbling $2.49 to $106.07 a barrel on Tuesday. An ounce of gold is currently fetching $1,649.20, up $2.20 from the previous session's close of $1,647. In the previous session, gold fell $20.30.
Among currencies, the U.S. dollar is trading at 84.02 yen compared to the 83.70 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is valued at $1.3225, unchanged compared to yesterday.
by RTT Staff Writer
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