With traders expressing continued optimism about the likelihood of further stimulus from the Federal Reserve, stocks may move to the upside in early trading on Tuesday. The major index futures are currently pointing to a modestly higher open, with the Dow futures up by 33 points.
The upward momentum for the markets comes as the Federal Reserve is holding a two-day monetary policy meeting, with the central bank expected to announce additional measures to stimulate the economy following the end of the meeting on Wednesday.
A recent batch of disappointing economic data has added to the optimism about further stimulus amid continued concerns about the impact of the ongoing financial crisis in Europe.
The Commerce Department recently released a report showing a decrease in housing starts in the month of May, although the drop came from a notably upwardly revised level in April.
The report showed that housing starts fell 4.8 percent to an annual rate of 708,000 in May from the revised April estimate of 744,000. Economists had expected housing starts to edge up to 720,000 from the 717,000 originally reported for the previous month.
At the same time, building permits, an indicator of future housing demand, jumped 7.9 percent to an annual rate of 780,000 in May from the revised April rate of 723,000. Building permits had been expected to climb to 736,000.
In corporate news, shares of Oracle (ORCL) could see early strength after the business software giant released its fourth quarter results ahead of schedule, reporting adjusted earnings and revenues that exceeded analyst estimates.
Oracle also said its board of directors has authorized the repurchase of up to an additional $10 billion worth of common stock under its existing share repurchase program.
Meanwhile, delivery giant FedEx (FDX) may move to the downside after reporting better than expected fourth quarter adjusted earnings but forecasting first quarter earnings below analyst estimates.
Stocks turned mixed over the course of the trading day on Monday after moving to the downside at the start of trading. The relatively lackluster performance came as traders shrugged off the results of the Greek elections ahead of the Federal Reserve's monetary policy meeting.
The major averages ended the day on opposite sides of the unchanged line, with the Dow stuck in the red. While the Dow edged down 25.35 points or 0.2 percent to 12,741.82, the Nasdaq rose 22.53 points or 0.8 percent to 2,895.33 and the S&P 500 crept up 1.94 points or 0.1 percent to 1,344.78.
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance on Tuesday. While Japan's Nikkei 225 Index ended the day down by 0.8 percent, Singapore's Straits Times Index advanced by 0.6 percent.
Meanwhile, the major European markets have all moved to the upside on the day. The U.K.'s FTSE 100 Index is up by 1.1 percent, while the German DAX Index and the French CAC 40 Index are up by 0.5 percent and 0.4 percent, respectively.
In commodities trading, crude oil futures are inching up $0.13 to $83.40 a barrel after falling $0.76 to $83.27 a barrel on Monday. Gold futures are climbing $1.60 to $1,628.60 an ounce. In the previous session, gold slipped $1.10 to $1,627 an ounce.
On the currency front, the U.S. dollar is trading at 78.95 yen compared to the 79.11 yen it fetched at the close of New York trading on Monday. Against the euro, the dollar is valued at $1.261 compared to yesterday's $1.2577.
by RTT Staff Writer
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