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Wall Street Set To Rebound From Losses; Bank Earnings, Data Loom


Sentiment on Wall Street seems to have improved slightly on Monday despite several risk events looming ahead. The recent pullback by the major averages may bring in traders, who look to capitalize on the oversold levels of the markets. The European debt travails are haunting markets, with Spain being touted as the next casualty. The debt offerings by Spain over the next two days may serve as litmus tests to ascertain the fiscal health of the nation. Commodities are mostly weaker, while the dollar is seeing mixed sentiment.

Traders may stay tuned to the U.S. retail sales report for March, the results of the New York Federal Reserve's manufacturing survey for April and the results of the National Association of Home Builders' housing market index for April. Additionally, earnings news from financial firms such as Citigroup (C) and M&T Bank (MTB) and other companies may also give direction to the markets.

As of 6:30 am ET, the Dow futures are rising 30 points, the S&P 500 futures are adding 3.75 points and the Nasdaq 100 futures are moving up 7.50 points.

U.S. stocks extended their retreat in the week ended April 13th, as global growth concerns and latent concerns about the debt situation in Europe kept sentiment subdued.

The re-emergence of economic fears may force traders direct their unwavering focus on the unfolding week's key economic events. The Commerce Department's retail sales report for March, the results of the manufacturing surveys of the New York and Philadelphia Federal Reserves, the Federal Reserve's industrial production report for March and the weekly jobless claims report are among the closely watched reports of the week.

A few housing readings such as the National Association of Home Builders' housing market index for April, the housing starts report for March and the National Association of Realtors' existing home sales report for March may also provide clarity on the economic outlook. The Commerce Department's business inventories report for February, the Conference Board's leading economic indicators index for March, a couple of Fed speeches and announcements concerning the Treasury auctions of 2-year, 5-year and 7-year notes round up the economic events of the week.

On the economic front, the Commerce Department is set to release its retail sales report for March at 8:30 am ET. Economists expect a 0.3 percent increase in retail sales and a 0.6 percent gain in retail sales, excluding autos.

The results of the New York Federal Reserve's empire state manufacturing survey are slated to be released at 8:30 am ET. The headline general business conditions index for April is expected to come in at 18 compared to 20.21 in the previous month.

The Treasury Department is due to release a report on the flows of financial instruments into and out of the U.S. for February at 9 am ET.
The Commerce Department is scheduled to release its business inventories report for February at 10 am ET. The report is expected to show a 0.6 percent increase in business inventories for the month.

Additionally, the National Association of Home Builders is scheduled to release the results of its April survey on homebuilders' confidence at 10 am ET. The consensus estimates call for the index to increase to 29 from 28 in the previous month.

Cleveland Federal Reserve Bank President Sandra Pianalto and St. Louis Federal Reserve Bank President James Bullard are scheduled to make public appearances at 12:30 pm and 3:30 pm ET, respectively.

In corporate news, Mattel (MAT) reported first quarter net income of 2 cents per share, including 4 cents per share in charges, compared to earnings of 5 cents per share last year, while sales fell 2 percent to $951.9 million. The results missed estimates.

SunPower (SPWR) said its cost reduction initiatives are on track. Towards these initiatives, the company expects to record pre-tax GAAP restructuring charges of $51 million to $69 million and also indicated that $47 million to $63 million will be recorded in the second quarter of 2012.

Procter & Gamble (PG) announced a 7 percent increase in its quarterly dividend to $0.562 per share on its common stock. The Nasdaq OMX Group announced that Texas Instruments (TXN) would replace First Solar (FSLR) in the Nasdaq 100 Index before the start of trading on April 23rd.

Asian stocks closed mostly lower, with traders in the region reacting the steep losses experienced by Wall Street stocks last Friday. Risk aversion prevailed, as Spanish bond yields continued to surge and caution prevailed ahead of some key U.S. economic data and earnings.

Japan's Nikkei 225 average closed down 167.35 points or 1.74 percent at 9,471, weighed down by a stronger yen that exerted downward pressure on export stocks. Australia's All Ordinaries closed 21.70 points or 0.49 percent lower at 4,383 and Hong Kong's Hang Seng Index closed at 20,611, down 90.40 points or 0.44 percent.

China widened the daily trading band that it had fixed for the USD/CNY exchange range to 1 percent from 0.5 percent, which is seen by economists as a small step towards moving towards a floating exchange range and fully convertible currency.

by RTTNews Staff Writer

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