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Futures Pointing To Higher Open On Wall Street

The major U.S. index futures are pointing to a higher opening on Monday following the weakness seen last week. The upward momentum on Wall Street comes as Hurricane Irma was not as bad as feared.

Following the lackluster performance seen in the previous session, stocks moved mostly lower during trading on Friday. Despite the drop by the broader markets, the relatively narrow Dow managed to eke out a modest gain.

The major averages turned in another mixed performance on the day. While the Dow inched up 13.01 points or 0.1 percent to 21,797.79, the Nasdaq fell 37.68 points or 0.6 percent to 6,360.19 and the S&P 500 dipped 3.67 points or 0.2 percent to 2,461.43.

For the holiday-shortened week, the major averages moved notably lower. While the Nasdaq tumbled by 1.2 percent, the Dow and the S&P 500 slid by 0.9 percent and 0.6 percent, respectively.

The weakness on Wall Street came amid concerns about the economic impact of Hurricane Irma, with the massive storm expected to make landfall in Florida early Sunday.

While Irma was downgraded from a category 5 to a category 4, FEMA Administrator Brock Long warned the hurricane continues to be a threat that is going to devastate the U.S. in either Florida or some of the southeastern states.

The approach of Irma comes close on the heels of Hurricane Harvey, which led to widespread devastation and flooding in Texas.

Selling pressure was also generated due to worries about North Korea, which is celebrating a holiday on Saturday that could be a key date for another intercontinental ballistic missile launch.

Nonetheless, the Dow managed to close modestly higher due largely to a substantial rebound by Travelers (TRV). Shares of Travelers jumped 4 percent, bouncing off a nine-month closing low.

Traders largely shrugged off a report from the Commerce Department showing wholesale inventories rose by more than anticipated in the month of July.

The Commerce Department said wholesale inventories climbed by 0.6 percent in July, matching the downwardly revised increase in June.

Economists had expected inventories to rise by 0.4 percent compared to the 0.7 percent increase originally reported for the previous month.

A separate report from the Federal Reserve showed consumer credit jumped by $18.5 billion in July compared to economist estimates for an increase of $15.1 billion.

Energy stocks saw substantial weakness on the day, as the price of crude oil fell sharply amid concerns about the impact of Hurricane Irma.

Reflecting the weakness in the energy sector, the NYSE Arca Natural Gas Index plummeted by 2.8 percent and the Philadelphia Oil Service Index tumbled by 1.8 percent.

Considerable weakness was also visible among steel stocks, as reflected by the 1.7 percent slump by the NYSE Arca Steel Index. The drop by the index came after it ended the previous session at its best closing level in six months.

Gold, semiconductor, and telecom stocks also saw notable weakness on the day, while housing and trucking stocks showed strong moves to the upside.
Commodity, Currency Markets

Crude oil futures are rising $0.17 to $47.65 a barrel after tumbling $1.61 to $47.48 a barrel last Friday. Meanwhile, an ounce of gold is trading at $1,336.70, down $4.40 from the previous session's close of $1,351.20. On Friday, gold inched up $0.90.

On the currency front, the U.S. dollar is trading at 108.75 yen compared to the 107.84 yen it fetched at the close of New York trading on Friday. Against the euro, the dollar is valued at $1.1986 compared to last Friday's $1.2036.

Asia

Most Asian stocks rose on Monday amid improved risk appetite as fears about hurricane Irma have waned and North Korea refrained from launching more missiles at the weekend despite speculation that it would do so.

The dollar clawed back losses as the United Nations prepared to vote on a new round of sanctions against North Korea.

Gold retreated from a one-year high while oil edged higher after falling more than 3 percent on Friday.

Oil was helped by reports that the production cut deal that OPEC, Russia, and several other producers agreed to late last year could be extended beyond March 2018.

Chinese stocks closed on a steady note after August inflation data released over the weekend came in better than expected, mainly on account of higher material costs.

The benchmark Shanghai Composite index rose 11.18 points or 0.33 percent to 3,376.42 while Hong Kong's Hang Seng index was up over 1 percent at 27,954 in late trade.

The offshore yuan declined after China's central bank reportedly scrapped reserve requirements on the trading of foreign-exchange forwards.

Japanese shares closed at their highest level in more than a week as the dollar recovered from a 10-month trough against the yen and data showed Japanese core machinery orders rose in July at the fastest pace since January 2016.

The Nikkei average jumped 270.95 points or 1.41 percent to 19,545.77, led by gains in recently battered automakers and financial stocks. The broader Topix index closed 1.17 percent higher at 1,612.26.

Honda Motor and Toyota Motor rose 1.6 percent and 1.2 percent, respectively, while Mitsubishi UFJ Financial, Mizuho Financial and Nomura Holdings rallied 1-2 percent.

Ono Pharma climbed 2.3 percent after positive clinical trial results for its U.S. partner's anticancer drug.

Australian shares rose sharply as banks and energy stocks rallied, helping more than offset weakness in the mining sector.

The benchmark S&P/ASX 200 index jumped 40.50 points or 0.71 percent to 5,713.10 while the broader All Ordinaries index finished 35.70 points or 0.62 percent higher at 5,775.10.

Commonwealth Bank rose 1.4 percent after recent steep losses on allegations of a breach in money laundering rules. The other three big banks closed up around 2 percent each. Investment bank Macquarie Group climbed as much as 3 percent after affirming its full-year earnings.

Weakness in iron ore and nickel prices pushed mining stocks lower, with BHP Billiton, Rio Tinto, South32 and Fortescue Metals Group losing 1-2 percent. Gold miners Evolution, Newcrest, Northern Star and Regis Resources lost 2-3 percent.

Origin Energy gained 1.3 percent after it entered into a $190m deal with Benaris. Gambling operator Tabcorp Holdings advanced 2.7 percent on saying it expects to complete its A$11 billion merger with rival Tatts Group in November.

Europe

European stocks rose sharply on Monday as fears about hurricane Irma have waned and North Korea refrained from launching more missiles at the weekend despite speculation that it would do so.

The euro ticked lower against the dollar after ECB Executive Board member Benoit Coeure said policy will remain more accommodative for longer than in previous cases of demand shock.

On the economic front, the French economy is expected to grow at a steady pace, as previously projected, in the third quarter, according to survey data published by Bank of France.

GDP is forecast to expand 0.5 percent, in line with the second estimate, and the same as in the second quarter.

The pan-European Stoxx Europe 600 index was up 0.9 percent at 378.99 in late opening deals after rising 0.2 percent on Friday.

The German DAX was rallying 1.1 percent, France's CAC 40 index was gaining 1.2 percent and the U.K.'s FTSE 100 was moving up 0.6 percent.

Sterling hit a three-and-a-half-week high against the euro on expectations that the Bank of England may sound more hawkish on interest rates when it meets on Thursday.

Insurance stocks led the surge, with Hannover Re, Munich Re, Scor,
Beazley and Hiscox rallying 4-6 percent on expectations that payouts for damage caused by Irma may turn out to be lower than initially feared.

The destructive storm has been downgraded to category 1 as it moved over the western Florida peninsula.

Banks also rose broadly, with Commerzbank, Deutsche Bank and Credit Agricole climbing 2-3 percent.

Swedish clothing retail firm H&M advanced 3.2 percent after a rating upgrade from Credit Suisse.

AstraZeneca rallied 2.5 percent after reporting positive results from two trials for lung cancer treatments.

Associated British Foods fell over 2 percent despite the food, ingredients and retail group raising its outlook for full year results.

Gold miner Randgold Resources dropped 1.5 percent and Fresnillo shed 1.2 percent as gold prices retreated from a one-year high on improved risk appetite.

Danish pharmaceutical company Lundbeck plummeted as much as 12 percent after announcing changes in executive management.

U.S. Economic Reports

The economic calendar for this week starts off relatively quiet but picks up in the coming days with the release of reports on producer and consumer price inflation, retail sales, and industrial production.

At 1 pm ET, the Treasury Department is due to announce the results of its auction of $24 billion worth of three-year notes.

by RTT Staff Writer

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