After showing a lack of direction over the past few sessions, stocks are likely to 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 32 points.
The upward momentum for the markets comes on the heels of the release of a report from the Commerce Department showing a stronger than expected rebounded by U.S. retail sales in the month of July.
The report showed that retail sales rose by 0.8 percent in July following a revised 0.7 percent drop in June. Economists had expected sales to edge up by 0.3 percent compared to the 0.5 percent decrease originally reported for the previous month.
Excluding auto sales, retail sales still rose by 0.8 percent in July, while core sales, which exclude autos, gasoline and building materials, increased by 0.9 percent.
Peter Boockvar, managing director at Miller Tabak, said, "Bottom line, in the context of the fear of the global economic slowdown, it's good to see retail sales bounce back from 3 months in a row of declines."
A separate report from the Labor Department showed that wholesale prices rose by more than expected in the month of July, with the producer price index climbing by 0.3 percent compared to estimates for a 0.2 percent increase.
The markets may also benefit from a positive reaction to some relatively upbeat economic news out of Europe. Data showed that the German economy grew by a better than expected 0.3 percent in the second quarter, while the French economy stagnated compared to expectations for a 0.1 percent contraction.
Additionally, home improvement retailer Home Depot (HD: Quote) is moving to the upside in pre-market trading after reporting stronger than expected second quarter earnings growth. The company also upwardly revised its full-year earnings guidance.
Stocks turned in a relatively lackluster performance during trading on Monday, eventually ending the session mostly lower. The choppy trading came as traders expressed uncertainty about the near-term outlook for the markets following recent strength.
After coming under pressure in morning trading, the major averages rebounded in the afternoon, finishing the day mixed. While the Nasdaq edged up 1.66 points or 0.1 percent to 3,022.52, the Dow fell 38.52 points or 0.3 percent to 13,169.43 and the S&P 500 dipped 1.76 points or 0.1 percent to 1,404.11.
In overseas trading, stock markets across the Asia-Pacific region moved higher during trading on Tuesday. Japan's Nikkei 225 Index advanced by 0.5 percent, while Hong Kong's Hang Seng Index surged up by 1.1 percent.
The major European markets have also moved to the upside on the day. While the German DAX Index has jumped by 1 percent, the U.K.'s FTSE 100 Index and the French CAC 40 Index are up by 0.5 percent and 0.3 percent, respectively.
In commodities trading, crude oil futures are climbing $0.67 to $93.40 a barrel after edging down $0.14 to $92.73 a barrel on Monday. Meanwhile, gold futures are slipping $0.40 to $1,612.20 an ounce. In the previous session, gold fell $10.20 to $1,612.60 an ounce.
On the currency front, the U.S. dollar is trading at 78.85 yen compared to the 78.32 yen it fetched at the close of New York trading on Monday. Against the euro, the dollar is valued at $1.2335 compared to yesterday's $1.2333.
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by RTT Staff Writer
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