With traders reacting positively to the latest batch of earnings news, stocks may move to the upside in early trading on Tuesday. The major index futures are currently pointing to a moderately higher open for the markets, with the Dow futures up by 48 points.
Financial stocks may help to lead the way higher after Goldman Sachs (GS) reported much better than expected second quarter results.
Goldman Sachs reported second quarter adjusted earnings of $1.78 per share on revenues of $6.6 billion compared to analyst estimates for earnings of $1.12 per share on revenues of $6.4 billion.
Beverage giant Coca-Cola (KO) also reported better than expected second quarter results, while Johnson & Johnson (JNJ) reported second quarter sales that fell short of estimates and lowered its full-year earnings guidance.
Nonetheless, trading activity may be somewhat subdued ahead of Federal Reserve Chairman Ben Bernanke's testimony before the Senate Banking Committee. Bernanke is due to begin his testimony at about 10 am ET.
Bernanke's comments are likely to be closely scrutinized for indications regarding the likelihood of further stimulus from the central bank.
Peter Boockvar, managing director at Miller Tabak said, "Today we'll get a sense of Bernanke's tolerance for what's clearly a slowing in growth."
"If Bernanke doesn't give the market what it wants today, the ensuing market sell-off in the context of a fragile economy will just clinch an eventual QE program," Boockvar added. "So we'll get the wink today or next time."
On the economic front, the Labor Department recently released a report showing that U.S. consumer prices came in unchanged in June, as a steep drop in energy prices was offset by higher prices for food, medical care, and apparel.
Shortly before the start of trading, the Federal Reserve is due to release its report on industrial production in the month of June. Economists expect production to increase by 0.3 percent, while the capacity utilization rate is expected to edge up to 79.2 percent.
The National Association of Home Builders is also scheduled to release its report on homebuilder confidence not long after the open. The housing market index is expected to inch up to 30 in July from 29 in June.
Stocks saw moderate weakness during trading on Monday, giving back some ground after ending last Friday's trading sharply higher. The pullback came on the heels of the release of a disappointing report on U.S. retail sales.
The major averages ended the day in negative territory but well off their lows for the session. The Dow fell 49.88 points or 0.4 percent to 12,727.21, the Nasdaq slid 11.53 points or 0.4 percent to 2,896.94 and the S&P 500 edged down 3.14 points or 0.2 percent to 1,353.64.
In overseas trading, stock markets across the Asia-Pacific region moved to the upside during trading on Tuesday. Japan's Nikkei 225 Index ended the day up by 0.4 percent, while Hong Kong's Hang Seng Index surged up by 1.8 percent.
Meanwhile, the major European markets have turned mixed over the course of the trading day. While the U.K.'s FTSE 100 Index is down by 0.4 percent, the French CAC 40 Index and the German DAX Index are both up by 0.4 percent.
In commodities trading, crude oil futures are climbing $0.30 to $88.73 a barrel after jumping $1.33 to $88.43 a barrel on Monday. Meanwhile, gold futures are slipping $2.80 to $1,588.80 an ounce. In the previous session, the precious metal edged down $0.40 to $1,591.60 an ounce.
Among currencies, the U.S. dollar is trading at 79.15 yen compared to the 78.86 yen it fetched at the close of New York trading on Monday. Against the euro, the dollar is valued at $1.2280 compared to yesterday's $1.2271.
by RTT Staff Writer
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