With strength in overseas markets generating some buying interest, stocks are likely to move to the upside in early trading on Monday. The major index futures are pointing to a higher open for the markets, with the Dow futures up by 51 points.
The upward momentum for the U.S. markets comes as stocks in Asia and Europe have moved notably higher despite the release of a disappointing Chinese manufacturing report.
Positive sentiment has also been generated by upbeat earnings news from Lowe's (LOW), with the home improvement retailer moving modestly higher in pre-market trading.
Lowe's reported fourth quarter earnings that fell year-over-year but came in above analyst estimates. The company also reported better than expected sales and forecast higher revenue in the current fiscal year.
Nonetheless, trading activity is likely to be somewhat subdued on the day amid a lack of any major U.S. economic data.
Traders may stick to the sidelines ahead of congressional testimony from Federal Reserve Chairman Ben Bernanke as well as key reports on new home sales, durable goods orders, and manufacturing activity.
Uncertainty about whether lawmakers in Washington will be able to reach an agreement to avoid the automatic government spending cuts due to go into effect at the end of the month may also contribute to choppy trading.
Last Friday, President Barack Obama said he remains hopeful that Congress will reach an agreement to avoid the spending cuts but noted that he has to convince lawmakers about the potential negative impacts of the cuts.
After moving mostly lower over the course of the two previous sessions, stocks showed a strong move back to the upside during trading on Friday. The markets saw a notable rebound, although the major averages remained below Tuesday's multi-year highs.
The major averages saw further upside going into the close, ending the session at their best levels of the day. The Dow rose 119.95 points or 0.9 percent to 14,000.57, the Nasdaq jumped 30.33 points or 1 percent to 3,161.82 and the S&P 500 advanced 13.18 points or 0.9 percent to 1,515.60.
As a result of the gains on the day, the Dow inched up by 0.1 percent for the week, while the Nasdaq fell by 0.9 percent and the S&P 500 edged down by 0.3 percent.
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Monday. Japan's Nikkei 225 Index surged up by 2.4 percent, while Australia's All Ordinaries Index advanced by 0.7 percent.
The major European markets have also shown strong moves to the upside on the day. While the U.K.'s FTSE 100 Index has risen by 0.5 percent, the French CAC 40 Index and the German DAX Index have jumped by 1.8 percent and 2.2 percent, respectively.
In commodities trading, crude oil futures are climbing $0.95 to $94.08 a barrel after falling $2.73 or 2.9 percent to $93.13 a barrel in the week ended February 22nd. Gold futures, which fell $36.70 or 2.3 percent to $1,572.80 an ounce last week, are jumping $16.60 to $1,589.40 an ounce.
On the currency front, the U.S. dollar eased 0.6 percent against the Japanese yen last week to 93.43 yen. Meanwhile, the greenback rose 1.2 percent against the euro before ending the week at $1.3194. The dollar is currently trading at 94 yen and is valued at $1.3293 versus the euro.
by RTT Staff Writer
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