After turning in a lackluster performance throughout the previous week, stocks may move to the upside in early trading on Tuesday. The major index futures are currently pointing to a modestly higher open for the markets, with the Dow futures up by 18 points.
The upward momentum for the markets is partly due to a rally by European stocks, which have moved notably higher on the heels of an upbeat report on economic sentiment in Germany.
The Zew Institute's economic sentiment index for Germany rose 16.7 points to 48.2 in February, marking the third straight month of growth. Economists had expected a reading of 35.
Buying interest may also be generated by reports of additional activity on the merger-and-acquisition front, with Office Depot (ODP) and OfficeMax (OMX) both moving sharply higher on reports that the office supplies retailers are engaged in advanced merger talks.
Citing people familiar with the matter, the Wall Street Journal said the deal between Office Depot and OfficeMax is expected to be stock-for-stock, although the paper said precise terms couldn't be learned.
Not long after the open, trading could be impacted by the release of the National Association Of Home Builders' report on homebuilder confidence in the month of February.
The housing market index is expected to edge up to a reading of 48 in February after coming in unchanged at 47 in January.
Nonetheless, trading activity may remain relatively subdued amid continued uncertainty about the near-term outlook for the markets.
While the markets are generally seen as overbought, traders have seemed reluctant to sell stocks and miss out on any further upside.
Stocks saw some volatility in the latter part of the trading day on Friday before ending the session showing another lackluster performance. The major averages closed on opposite sides of the unchanged line for the fourth consecutive session.
After pulling back sharply in the mid-afternoon, the Dow rebounded going into the close and ended the day up by 8.37 points or 0.1 percent at 13,981.76. Meanwhile, the Nasdaq slipped 6.63 points or 0.2 percent to 3,192.03 and the S&P 500 edged down 1.59 points or 0.1 percent to 1,519.79.
The major averages also turned in a mixed performance for the week, as the S&P 500 inched up by 0.1 percent, while the Dow and the Nasdaq both dipped by 0.1 percent.
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Tuesday. While Japan's Nikkei 225 Index fell by 0.3 percent, Australia's All Ordinaries Index rose by 0.4 percent.
Meanwhile, the major European markets have all shown notable moves to the upside. The U.K.'s FTSE 100 Index has advanced by 0.6 percent, while the German DAX Index and the French CAC 40 Index have jumped by 1.2 percent and 1.5 percent, respectively.
In commodities trading, crude oil futures are inching up $0.13 to $95.99 a barrel after edging up $0.14 or 0.2 percent to $95.86 a barrel in the week ended February 16th. Gold futures, which fell $57.40 or 3.4 percent to $1,609.50 an ounce last week, are climbing $1.80 to $1,611.30 an ounce.
On the currency front, the U.S. dollar firmed up against the yen last week, ending the week up 1.4 percent at 93.95 yen. Meanwhile, the greenback dipped 0.1 percent against the euro before ending the week at $1.3347. The dollar is currently trading at 93.49 yen and is valued at $1.3348 versus the euro.
by RTT Staff Writer
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