After moving mostly higher over the course of the three previous sessions, stocks may give back some ground in early trading on Wednesday. The major index futures are currently pointing to a lower open for the markets, with the Dow futures down by 65 points.
Profit taking is likely to contribute to any early weakness on Wall Street, with some traders likely looking to cash in on the recent strength in the markets.
The recent gains by stocks drove the major averages to three-month closing highs, with the Nasdaq and the S&P 500 climbing back above the key psychological levels of 3,000 and 1,400, respectively.
While optimism about the possibility of further monetary stimulus contributed to the recent strength on Wall Street, Dallas Federal Reserve President Richard Fisher put a damper on those hopes in an interview with Bloomberg.
Fisher suggested that the Fed has done its job regarding providing the necessary economic stimulus and said that it is now up to the private sector. He also said that Congress needs to address the fiscal policy uncertainty in order for the liquidity in the system to be put to work.
The remarks from Fisher are in stark contrast to comments by Boston Fed President Eric Rosengren, who called for an "open-ended" quantitative easing program to boost economic growth during an interview with CNBC on Tuesday.
Peter Boockvar, managing director at Miller Tabak, said, "Fisher is a non-voting member as well as Rosengren. As most of the voting members on the FOMC are uber-doves though, we can assume the argument of more easing will likely carry the day on September 13th."
"I commend Fisher however in standing out with the few at the Fed who are acknowledging the major limits of Fed policy at this point where the old rules no longer apply," he added.
Traders are also digesting quarterly results from Disney (DIS: Quote), which reported its fiscal third quarter results after the close of trading on Tuesday. The entertainment giant reported better than expected earnings but on revenues that came in below estimates.
McDonald's (MCD: Quote) is also likely to be in focus after the fast food giant reported global comparable sales that were flat in July compared to expectations for an increase in excess of 2 percent.
On the economic front, the Labor Department recently released a report showing stronger than expected U.S. labor productivity growth in the second quarter, although the report also showed a sharper than expected jump in labor costs.
With traders expressing renewed optimism about the possibility of further monetary stimulus, stocks moved mostly higher during trading on Tuesday. The gains on the day extended the upward move seen over the course of the two previous sessions.
The major averages pulled back off their best levels of the day in afternoon trading but remained firmly positive. The Dow rose 51.09 points or 0.4 percent to 13,168.60, the Nasdaq jumped 25.95 points or 0.9 percent to 3,015.86 and the S&P 500 advanced 7.12 points or 0.5 percent at 1,401.35.
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher on Wednesday. Japan's Nikkei 225 Index rose by 0.9 percent, while China's Shanghai Composite Index edged up by 0.2 percent. However, Hong Kong's Hang Seng bucked the uptrend and closed just below the unchanged line.
Meanwhile, the major European markets have all moved to the downside on the day, partly offsetting their recent gains. While the U.K.'s FTSE 100 Index is down by 0.6 percent, the German DAX Index and the French CAC 40 Index are both down by 0.7 percent.
In commodities trading, crude oil futures are slipping $0.39 to $93.28 a barrel after jumping $1.47 to $93.67 a barrel on Tuesday. An ounce of gold is currently valued at $1,609.90, down $2.90 from the previous session's close of $1,612.80. Gold slipped $3.40 on Tuesday.
On the currency front, the U.S. dollar is trading at 78.37 yen compared to the 78.60 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is valued at $1.2339 compared to yesterday's $1.2399.
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by RTT Staff Writer
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