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


Following the mixed performance seen in the previous session, stocks may move to the upside in early trading on Tuesday. The major index futures are currently pointing to a higher open for the markets, with the Dow futures up by 62 points.

Stocks may benefit from optimism about the economic impact of the tax reform bill approved by Senate Republicans over the weekend.

With the vote to approve the bill, lawmakers from the Senate and House will need to go to conference to work out differences in the bills passed by the two chambers.

On the U.S. economic front, the Commerce Department released a report showing the trade deficit widened more than expected in the month of October.

The report said the trade deficit widened to $48.7 billion in October from a revised $44.9 billion in September. Economists had expected the deficit to widen to $47.5 billion.

Shortly after the start of trading, the Institute for Supply Management is scheduled to release its report on activity in the service sector in the month of November.

The ISM's non-manufacturing index is expected to dip to 59.0 in November from 60.1 in October, although a reading above 50 would still indicate growth in the service sector.

Stocks turned mixed over the course of the trading session on Monday after an initial move to the upside. While the Dow reached a new record closing high, the Nasdaq and the S&P 500 ended the day in negative territory.

The Dow rose 58.46 points or 0.2 percent to 24,290.05, but the Nasdaq tumbled 72.22 points or 1.1 percent to 6,775.37 and the S&P 500 edged down 2.78 points or 0.1 percent to 2,639.44.

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Tuesday. Japan's Nikkei 225 Index fell by 0.4 percent, while Hong Kong's Hang Seng Index slumped by 1 percent.

Meanwhile, the major European markets are turning in a mixed performance on the day. While the U.K.'s FTSE 100 Index has inched up by 0.1 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 $0.18 to $57.29 a barrel after sliding $0.89 to $57.47 a barrel on Monday. Meanwhile, after falling $4.60 to $1,277.70 an ounce in the previous session, gold futures are dipping $2.90 to $1,274.80 an ounce.

On the currency front, the U.S. dollar is trading at 112.62 yen compared to the 112.41 yen it fetched at the close of New York trading on Monday. Against the euro, the dollar is valued $1.1844 compared to yesterday's $1.1866.

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