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Profit Taking May Lead To Weakness On Wall Street

The major U.S. index futures are pointing to a lower opening on Wednesday, with stocks likely to give back ground after climbing to record highs in the previous session.

Profit taking may contribute to early weakness on Wall Street, as traders cash in on the upward move seen over the past few sessions.

Nonetheless, trading activity may be somewhat subdued as traders look ahead to the release of key economic data in the coming days.

Reports on consumer prices and weekly jobless claims are due to be released on Thursday, with data on retail sales, industrial production and consumer sentiment is scheduled for Friday.

Stocks moved mostly higher during trading on Tuesday, adding to the strong gains posted on Monday. With the upward move, the major averages all climbed to new record closing highs.

The major averages finished the day moderately higher. The Dow rose 61.49 points or 0.3 percent to 22,118.86, the Nasdaq climbed 22.02 points or 0.3 percent to 6,454.28 and the S&P 500 advanced 8.37 points or 0.3 percent to 2,496.48.

The continued strength on Wall Street came as traders continued to react to indications that the damage from Hurricane Irma was not as bad as feared. Easing international tensions also generated buying interest.

Commodity, Currency Markets

Crude oil futures are climbing $0.44 to $48.67 a barrel after inching up $0.16 to $48.23 a barrel on Tuesday. Gold futures, which slipped $3 to $1,332.70 an ounce in the previous session, are rising $4.80 to $1,337.50 an ounce.

On the currency front, the U.S. dollar is trading at 109.97 yen compared to the 110.17 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is valued at $1.1985 compared to yesterday's $1.1967.

Asia

Asian stocks ended mixed on Wednesday despite U.S. stocks hitting record highs overnight on expectations that a tax reform plan will get passed this year.

Chinese shares posted modest gains to finish near 20-month highs after a survey showed investors were optimistic about economic conditions in August.

The benchmark Shanghai Composite Index inched up 6.05 points or 0.2 percent to 3,385.54, while Hong Kong's Hang Seng Index fell 78.16 points or 0.3 percent to 27,894.08.

Japanese shares rose for a third consecutive session as the dollar extended its sharp rally against the yen on easing concerns over North Korea and U.S. hurricanes. The Nikkei 225 Index rose 89.20 points or 0.5 percent to 19,865.82, and the broader Topix index closed up 0.6 percent at 1,637.33.

Exporters Hitachi and Panasonic jumped 3-4 percent. Apple supplier Nidec rallied 3.5 percent after Apple unveiled three new iPhones. Toshiba closed on a flat note after announcing a deal with a consortium to sell its prized chip business.

Australian shares closed marginally lower after two straight days of gains. Investors ignored encouraging consumer confidence figures from Westpac Bank and the Melbourne Institute.

Commonwealth Bank of Australia rose 0.8 percent after Australian Prudential Regulation Authority (APRA) Chairman Wayne Byers told a parliamentary committee the bank was "financially sound" despite alleged money-laundering breaches. ANZ and Westpac eked out modest gains, while NAB shed 0.2 percent.

Mining heavyweights BHP Billiton and Rio Tinto climbed about 1 percent each after Chinese steel and iron ore futures regained some ground following a five-day retreat.

CIMIC Group gained 0.8 percent after its Leighton Asia unit won an A$470 million sewer project in Singapore. PharmAust jumped as much as 8.6 percent on receiving a patent in Europe for the use of its lead drug monepantel as a cancer therapy.

Europe

European stocks are turning in a lackluster performance on Wednesday as investors moved to the sidelines awaiting further clarity over North Korea and U.S. President Donald Trump's tax reform plan.

While the U.K.'s FTSE 100 Index has fallen by 0.3 percent, the French CAC 40 Index and the German DAX Index are both up by 0.1 percent.

In economic news, German consumer price inflation rose to a four-month high of 1.8 percent in August from 1.7 percent in July, final data from Destatis showed.

Eurozone industrial production grew 0.1 percent month-on-month in July, in contrast to a 0.6 percent drop in June, Eurostat reported. Monthly growth matched economists' expectations.

Meanwhile, U.K. wage growth for the three months to July missed expectations despite the jobless rate hitting a 42-year low of 4.3 percent.

Austrian specialty steelmaker Voestalpine has fallen after Germany's antitrust regulator raided its headquarters as part of an investigation into suspected violations of antitrust laws in the industry.

Swiss luxury goods group Richemont has also moved lower despite the company reporting a 12 percent increase in sales at constant exchange rates for the five months ended 31 August 2017.

Mining stocks have also succumbed to selling pressure as base metal prices drifted lower amid selling by funds.

Meanwhile, EasyJet shares have rallied after the low cost airline said it would allow customers to use its website to book long-haul flights with other carriers.

U.S. Economic Reports

A report released by the Labor Department showed producer prices rose by slightly less than expected in the month of August.

The Labor Department said its producer price index for final demand edged up by 0.2 percent in August after slipping by 0.1 percent in July. Economists had expected the index to climb by 0.3 percent.

Excluding food and energy prices, core producer prices inched up by 0.1 percent in August after dipping by 0.1 percent in July. Core prices had been expected to rise by 0.2 percent.

At 10:30 am ET, the Energy Information Administration is scheduled to release its report on oil inventories in the week ended September 8th. Crude oil inventories are expected to climb by 3.2 million barrels.

The Treasury Department is due to announce the results of its auction of $12 billion worth of thirty-year bonds at 1 pm ET.

by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

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