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Stocks May See Early Strength On Upbeat Retail Sales Data - U.S. Commentary

With traders reacting positively to the latest retail sales data, stocks are likely to move to the upside in early trading on Monday. The major index futures are currently pointing to a notably higher open for the markets, with the Dow futures up by 81 points.

The upward momentum for the markets comes following the release of a report from the Commerce Department showing much stronger than expected retail sales growth in the month of March.

The report showed that retail sales rose by 0.8 percent in March following a revised 1.0 percent increase in February. Economists had been expecting retail sales to increase by a much more modest 0.3 percent.

Excluding a 0.9 percent increase in auto sales, retail sales still rose by 0.8 percent in March compared to a 0.9 percent increase in the previous month.

Peter Boockvar, managing director at Miller Tabak, said, "Strong sales of building materials were the key factor in the upside to the headline figure and we'll see over the next few months what's been pulled forward."

Meanwhile, a separate report from the New York Federal Reserve showed that its index of regional manufacturing fell by much more than anticipated in the month of April.

The New York Fed said its general business conditions index plunged to 6.6 in April from 20.2 in March, although a positive reading indicates an increase in manufacturing activity. The index had been expected to edge down to 18.0.

In corporate news, shares of Citigroup (C) are likely to be in focus after the financial giant reported first quarter net income of $0.95 per share, down from $0.99 per share in the same quarter a year ago. Excluding special items, Citigroup reported first quarter earnings of $1.11 per share

Stocks moved sharply lower over the course of the trading day on Friday, giving back some ground after posting strong gains in the two previous sessions. Renewed concerns about corporate earnings and the global economy contributed to the weakness in the markets.

The major averages saw further downside going into the close, ending the session near their worst levels of the day. The Dow slid 136.99 points or 1.1 percent to 12,849.59, the Nasdaq tumbled 44.22 points or 1.5 percent to 3,011.33 and the S&P 500 fell 17.31 points or 1.3 percent to 1,370.26.

With the losses on the day and the sell-off seen earlier in the week, the major averages all posted weekly losses. The Dow fell by 1.6 percent, while the Nasdaq and the S&P 500 dropped by 2.2 percent and 2 percent, respectively.

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower on Monday. Japan's Nikkei 225 Index tumbled by 1.7 percent, while Hong Kong's Hang Seng Index ended the day down by 0.4 percent.

Meanwhile, the major European markets have moved to the upside on the day. While the U.K.'s FTSE 100 Index is up by 0.5 percent, the German DAX Index is up by 0.9 percent, and the French CAC 40 Index has jumped by 1.4 percent.

In commodities trading, crude oil futures are climbing $0.14 to $102.97 a barrel after falling $0.48 or 0.5 percent to $102.83 a barrel in the week ended April 13th. Gold futures, which rose $30.10 or 1.9 percent to $1,660.20 an ounce last week, are sliding $6.20 to $1,654 an ounce.

On the currency front, the U.S. dollar fell 0.9 percent against the Japanese yen last week before ending at 80.93 yen. Meanwhile, the greenback edged up 0.2 percent against the euro to $1.3078. Currently, the dollar is trading at 80.80 yen and is valued at $1.3046 versus the euro.

by RTT Staff Writer

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