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Stocks May Give Back Ground In Early Trading - U.S. Commentary

4/3/2012 8:57 AM ET

After turning higher over the course of the previous session, stocks are likely to move back to the downside in early trading on Tuesday. The major index futures are currently pointing to a modestly lower open, with the Dow futures down by 32 points.

Profit taking is likely to contribute to any early weakness on Wall Street, with some traders likely looking to cash in on Monday's gains, which lifted the Dow to a new four-year closing high. The S&P 500 also reached its best closing level since May of 2008.

Nonetheless, trading activity may be somewhat subdued ahead of the release of the minutes of the March Federal Reserve meeting, which are scheduled to be released at 2 pm ET.

The minutes of the meeting are likely to be closely scrutinized for indications regarding the likelihood of further quantitative easing by the central bank.

Ahead of the release of the minutes, trading could be impacted by the Commerce Department's monthly report on factory orders. Economists expect orders to increase by 1.5 percent in February following a 1.0 percent drop in January.

Traders are also likely to keep a close eye on the release of monthly sales results from the nation's major auto manufacturers.

Chrysler recently reported a 34 percent year-over-year jump in auto sales in March, while Ford (F) executive vice president Mark Fields told CNBC that the auto giant's sales rose by 5 percent.

Additionally, Molson Coors Brewing (TAP) may be in focus after the company announced an agreement to acquire European brewer StarBev for approximately $3.5 billion.

With traders reacting positively to the latest U.S. manufacturing data, stocks showed a substantial turnaround over the course of morning trading on Monday. The major averages climbed well off their worst levels of the day and into positive territory.

The major averages gave back some ground going into the close but held on to notable gains. The Dow rose 52.45 points or 0.4 percent to 13,264.49, the Nasdaq advanced 28.13 points or 0.9 percent to 3,119.70 and the S&P 500 climbed 10.43 points or 0.7 percent to 1,418.90.

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher on Tuesday, although Japan's Nikkei 225 Index bucked the uptrend and fell by 0.6 percent. Hong Kong's Hang Seng Index jumped 1.3 percent, while Australia's All Ordinaries Index edged up by 0.2 percent.

Meanwhile, the major European markets have turned lower over the course of the trading day. While the French CAC 40 Index is down by 0.8 percent, the German DAX Index and the U.K.'s FTSE 100 Index are down by 0.4 percent and 0.3 percent, respectively.

In commodities trading, crude oil futures are sliding $0.52 to $104.71 a barrel after advancing $2.21 to $105.23 a barrel on Monday. Gold futures are slipping $3.60 to $1,676.10 an ounce. In the previous session, gold rose $7.80 to $1,679.70 an ounce.

Among currencies, the U.S. dollar is trading at 82.17 yen compared to the 82.07 yen it fetched at the close of New York trading on Monday. Against the euro, the dollar is valued at $1.3319 compared to yesterday's $1.3320.

by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

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