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Stocks May Move To The Downside In Early Trading - U.S. Commentary


After turning higher over the course of the previous session, stocks are likely to move back to the downside in early trading on Tuesday. The major index futures are currently pointing to a lower open for the markets, with the Dow futures down by 51 points.

Lingering uncertainty about the outlook for the Republican tax reform proposal may weigh on the markets as the House prepares to vote on their bill later this week.

The House bill has significant differences from the Senate version, raising concerns about whether GOP lawmakers will be able to work together to combine the legislation.

On the U.S. economic front, the Labor Department released a report showing producer prices increased by more than anticipated in the month of October.

The Labor Department said its producer price index for final demand climbed by 0.4 percent in October, matching the increase seen in September. Economists had expected prices to inch up by 0.1 percent.

Excluding food and energy prices, core producer prices also rose by 0.4 percent in October after a matching increase in the previous month. Core prices had been expected to rise by 0.2 percent.

Nonetheless, traders may be reluctant to make significant moves ahead of the release of reports on consumer prices, retail sales, industrial production and housing starts in the coming days.

After seeing initial weakness, stocks moved modestly higher over the course of the trading session on Monday. The major averages climbed well off their early lows and managed to end the day in positive territory.

The Dow inched up 17.49 points or 0.1 percent to 23,439.70, the Nasdaq crept up 6.66 points or 0.1 percent to 6,757.60 and the S&P 500 edged up 2.54 points or 0.1 percent to 2,584.84.

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Tuesday. Japan's Nikkei 225 Index closed just below the unchanged line, while Hong Kong's Hang Seng Index dipped by 0.1 percent.

Meanwhile, the major European markets have turned mixed on the day. While the U.K.'s FTSE 100 Index has risen by 0.2 percent, the German DAX Index is down by 0.2 percent and the French CAC 40 Index is down by 0.4 percent.

In commodities trading, crude oil futures are slipping $0.25 to $56.51 a barrel after inching up $0.02 to $56.56 a barrel on Monday. Meanwhile, after climbing $4.70 to $1,278.90 an ounce in the previous session, gold futures are falling $4.80 to $1,274.10 an ounce.

On the currency front, the U.S. dollar is trading at 113.50 yen compared to the 113.62 yen it fetched at the close of New York trading on Monday. Against the euro, the dollar is valued $1.1757 compared to yesterday's $1.1667.

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