After turning in a mixed performance in the previous session, stocks are likely to move to the upside in early trading on Tuesday. The major index futures are currently pointing to a higher open for the markets, with the Dow futures up by 73 points.
The markets are likely to benefit from a drop in Spanish bond yields, which has helped to offset some of the recently renewed concerns about the European debt crisis.
Upbeat earnings news may also generate some buying interest, with Coca-Cola (KO) moving higher in pre-market trading after the beverage giant reported better than expected first quarter earnings.
Coca-Cola reported first quarter earnings that rose to $0.89 per share from $0.82 per share in the same quarter a year ago, coming in above analyst estimates for $0.87 per share. The company benefited from a 5 percent increase in the volume of drinks sold.
Goldman Sachs (GS) also reported better than expected first quarter earnings and announced an increase in its quarterly dividend to $0.46 per share.
While Johnson & Johnson (JNJ) also reported stronger than expected earnings growth, the healthcare giant reported a modest drop in sales.
Disappointing housing data may limit any early upside for the markets, with the Commerce Department releasing a report showing an unexpected drop in housing starts.
The report showed that housing starts fell 5.8 percent to an annual rate of 654,000 in March from the revised February estimate of 694,000. Economists had expected starts to rise to an annual rate of 700,000.
At the same time, the Commerce Department said building permits rose 4.5 percent to an annual rate of 747,000 in March from the revised February rate of 715,000. With the increase, building permits rose to their highest level since September of 2008.
Stocks turned in a mixed performance on Monday following the release of a mixed batch of U.S. economic data. Uncertainty about the outlook for corporate earnings also impacted trading along with renewed concerns about the European debt crisis.
While the Dow managed to remain positive throughout the session, the Nasdaq and the S&P 500 closed in the red. The Dow rose by 71.82 points or 0.6 percent to 12,921.41, while the Nasdaq fell 22.93 points or 0.8 percent to 2,988.40 and the S&P 500 edged down 0.69 points or 0.1 percent to 1,369.57.
In overseas trading, stock markets across the Asia-Pacific moved modestly lower on Tuesday, extending the drop seen in the previous session. Japan's Nikkei 225 Index edged down by 0.1 percent, while Hong Kong's Hang Seng Index slipped 0.2 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 0.8 percent, the German DAX Index and the French CAC 40 Index are up by 1.1 percent and 1.4 percent, respectively.
In commodities trading, crude oil futures are advancing $1.08 to $104.01 a barrel after inching up $0.10 to $102.93 a barrel on Monday. Gold futures are climbing $3 to $1,652.70 an ounce. In the previous session, the precious metal fell $10.50 to $1,649.70 an ounce.
On the currency front, the U.S. dollar is trading at 80.59 yen compared to the 80.41 yen it fetched at the close of New York trading on Monday. Against the euro, the dollar is valued at $1.3137 compared to yesterday's $1.3142.
by RTT Staff Writer
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