After moving notably higher over the course of the two previous sessions, stocks are likely to give back some ground in early trading on Monday. The major index futures are currently pointing to a lower open for the markets, with the Dow futures down by 71 points.
Profit taking is likely to contribute to any early weakness on Wall Street, with traders likely to cash in on last week's gains, which lifted the Dow and the S&P 500 to their best closing levels in over a month.
While the closely watched Greek elections resulted in a victory for the pro-bailout New Democracy party, traders remain concerned about the ongoing financial crisis in Europe amid rising bond yields in Spain and Italy.
Peter Boockvar, managing director at Miller Tabak, said, "The decision of a majority of the Greeks to in essence stay in the euro should be viewed as a lack of a negative rather than a positive."
"Greece is still left with two choices over the coming years and that is either default again or still eventually leave the euro," he added. "Their debt is just too overwhelming to see otherwise."
With the Greek elections now in the rear-view mirror, traders are likely to turn their attention to the Federal Reserve's upcoming monetary policy meeting.
Many traders expect the Fed to announce additional stimulus measures when it releases its post-meeting statement on Wednesday. A lack of further stimulus could lead to a sell-off on Wall Street.
Not long after the start of trading this morning, the National Association of Home Builders is scheduled to release its report on homebuilder confidence in the month of June. The homebuilder confidence index is expected to come in unchanged from the previous month at 29.
by RTT Staff Writer
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