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Futures Pointing To Initial Strength On Wall Street

The major U.S. index futures are pointing to a higher opening on Tuesday following the mixed performance seen in the previous session.

Stocks may benefit from recent upward momentum, which has lifted the markets to record highs amid optimism about the economic outlook.

Continued strength seen in the overseas markets on the day may also contribute to early buying interest on Wall Street.

Overall trading activity may remain somewhat subdued, however, with a lack of major U.S. economic data keeping some traders on the sidelines.

Following the rally seen last week, stocks turned in a relatively lackluster performance during trading on Monday. The major averages spent much of the day lingering near the unchanged line before closing mixed.

The Dow edged down 12.87 points or 0.1 percent to 25,283.00, while the Nasdaq and the S&P 500 reached new record closing highs. The Nasdaq climbed 20.83 points or 0.3 percent to 7,157.39 and the S&P 500 rose 4.56 points or 0.2 percent to 2,747.71.

The choppy trading on the day came as traders expressed some uncertainty about the near-term outlook for the markets following the recent run to record highs.

A lack of major U.S. economic data also kept traders on the sidelines ahead of the release of key reports on retail sales and producer and consumer prices later this week.

Financial giants JPMorgan Chase (JPM) and Wells Fargo (WFC) are also due to report their quarterly results on Friday as earnings season gets underway.

Oil service stocks showed a significant move to the upside on the day, driving the Philadelphia Oil Service Index up by 1.9 percent. With the gain, the index climbed to its best closing level in over eight months.

The strength among oil service stocks came amid an increase by the price of crude oil, with crude for February delivery rising $0.29 to $61.73 a barrel.

Considerable strength was also visible among railroad stocks, as reflected by the 1.5 percent advance by the Dow Jones Railroads Index. The index reached a record closing high.

Steel, networking, trucking and computer hardware stocks also saw notable strength, while gold, biotechnology and airline stocks moved to the downside on the day.

Commodity, Currency Markets

Crude oil futures are inching up $0.21 to $61.94 a barrel after rising $0.29 to $61.73 a barrel on Monday. Meanwhile, after dipping $1.90 to $1,320.40 an ounce in the previous session, gold futures are sliding $5.40 to $1,315 an ounce.

On the currency front, the U.S. dollar is trading at 112.66 yen compared to the 113.09 yen it fetched at the close of New York trading on Monday. Against the euro, the dollar is valued $1.1917 compared to yesterday's $1.1967.

Asia

Asian stocks closed mostly higher on Tuesday as investors digested earnings guidance from tech heavyweight Samsung Electronics and kept an eye on ongoing talks between South Korea and North Korea.

Chinese shares extended gains for the eighth straight session after central bank data showed China's foreign exchange reserves increased for the eleventh straight month in December.

Foreign exchange reserves rose $20.7 billion to $3.14 trillion at the end of December, reaching the highest level since September of 2016. Chinese producer and consumer price inflation data will be released on Wednesday.

The benchmark Shanghai Composite Index inched up 5.35 points or 0.2 percent to 3,414.83, while Hong Kong's Hang Seng Index climbed 111.88 points or 0.4 percent to 31,011.41.

Japanese shares hit a 26-year high, with sentiment lifted by record highs on Wall Street overnight and strong December sales reported by clothing company Fast Retailing at its Uniqlo clothing outlets in Japan.

Investors shrugged of the yen's strength against the dollar after the Bank of Japan trimmed the size of its bond-repurchase offer in its latest market operation.

The Nikkei 225 Index climbed 135.46 points or 0.6 percent to 23,849.99, the highest closing level since November of 1991. The broader Topix index closed 0.5 percent higher at 1,889.29.

Index heavyweight Fast Retailing rose 1.2 percent, while tech stocks Tokyo Electron and TDK Corp gained 1.7 percent and 0.9 percent, respectively.

Australian shares rose for a fifth consecutive session, led by miners and financials. The benchmark S&P/ASX 200 Index gained 5.40 points or 0.1 percent to close at 6,135.80, a new five-year high. The broader All Ordinaries Index finished 5 points higher at 6,241.50.

Banks ANZ, Commonwealth and Westpac rose between 0.1 percent and 0.7 percent while energy major Oil Search advanced 1 percent and Origin Energy added 1.5 percent.

Miners BHP Billiton, Rio Tinto, Fortescue Metals Group and South32 climbed around 2 percent each after China's iron ore futures rose more than 3 percent on Tuesday to hit a four-month high.

Retailer Noni B jumped 4.5 percent after a positive trading update. Meanwhile, Retail Food Group slumped more than 6 percent after issuing another profit warning.

On the economic front, job advertisements in Australia decreased in December after rising in the two previous months, the latest survey from the Australian and New Zealand Banking Group revealed.

A gauge of Australia's consumer confidence strengthened notably during the week ended January 8th, while the total number of building approvals issued in the country rose a seasonally adjusted 11.7 percent in December.

Europe

European stocks are extending gains from the previous session on Tuesday, although the momentum appears to have slowed somewhat after the Bank of Japan trimmed the size of its bond-repurchase offer in its latest market operation.

While the French CAC 40 Index has risen by 0.7 percent, the German DAX Index and the U.K.'s FTSE 100 Index are both up by 0.4 percent.

Altice N.V. is soaring after the telecom company's board approved plans for the separation of Altice USA Inc. (ATUS) from Altice NV, which will be renamed "Altice Europe."

Biocartis Group N.V. has also rallied after it signed a new companion diagnostic development agreement with biotechnology company Amgen (AMGN).

Morrison Supermarkets has jumped in London after reporting a better-than-expected performance over the holiday period.

Meanwhile, Tesco has moved lower after its sales grew 3.1 percent in the 12 weeks to December 31st, according to Kantar Worldpanel.

On the economic front, German industrial output expanded 3.4 percent month-on-month in November, reversing a revised 1.2 percent drop in October, official data showed. Output was expected to grow 1.8 percent.

Another report revealed that German exports climbed 4.1 percent in November, in contrast to a 0.3 percent drop registered in October. The increase exceeded the expected growth of 1.2 percent.

France's foreign trade gap widened in November, as exports fell faster than imports, data from the customs office showed.

The trade deficit rose to 5.7 billion euros in November from 5.3 billion euros in the previous month. Economists had expected the deficit to narrow to 4.7 billion euros.

U.S. Economic Reports

At 10 am ET, Minneapolis Federal Reserve President Neel Kashkari is due to participate in a moderated Q&A at Cargill Headquarters in Minnesota.

The Treasury Department is scheduled to announce the results of its auction of $24 billion worth of three-year notes at 1 pm ET.

Stocks In Focus

Shares of Target (TGT) are moving notably higher in pre-market trading after the retailer raised its fourth quarter earnings guidance on strong holiday sales.

Data storage company Seagate Technology (STX) may also see early strength after providing upbeat fiscal second quarter gross margin, revenue and shipment guidance.

On the other hand, shares of Allergan (AGN) could move to the downside after the pharmaceutical company forecast fiscal 2018 revenues below analyst estimates.

Athletics apparel maker Under Armour (UAA) may also come under pressure after Susquehanna downgraded its rating on the company's stock to Negative from Neutral.

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