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Futures Pointing To Roughly Flat Open On Wall Street - U.S. Commentary

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Stocks may show a lack of direction in early trading on Wednesday following the sharp pullback seen in the previous session. The major index futures are currently pointing to a roughly flat open for the markets, with the Dow futures down by just 19 points.

Geopolitical uncertainty may keep some traders on the sidelines after North Korea threatened to cancel an historic meeting between leader Kim Jong Un and President Donald Trump.

In a statement published by the state-run Korean Central News Agency, North Korean First Vice Minister of Foreign Affairs Kim Kye Gwan suggested that Trump must accept the reclusive communist country as a nuclear power.

"If the U.S. is trying to drive us into a corner to force our unilateral nuclear abandonment, we will no longer be interested in such dialogue and cannot but reconsider our proceeding to the DPRK-U.S. summit," Kim said.

Kim pointed to "unbridled remarks" by U.S. officials such as National Security Adviser John Bolton calling on North Korea to abandon nuclear weapons first and be compensated afterward.

The statement from Kim comes after North Korea canceled high-level talks with South Korea planned for Wednesday over U.S.-South Korean military drills.

Despite the threats, White House Press Secretary Sarah Sanders told Fox News that Trump remains "ready to meet" with the North Korean leader.

On the U.S. economic front, the Commerce Department released a report showing a sharp pullback in new residential construction in the month of April.

The report said housing starts plunged by 3.7 percent to an annual rate of 1.287 million in April after jumping by 3.6 percent to an upwardly revised 1.336 million in March.

Economists had expected housing starts to drop to an annual rate of 1.310 million from the 1.319 million originally reported for the previous month.

The Commerce Department said building permits also tumbled by 1.8 percent to an annual rate of 1.352 million in April after surging up by 4.1 percent to an upwardly revised 1.377 million in March.

Building permits, an indicator of future housing demand, had been expected to edge down to 1.350 million from the 1.354 million originally reported for the previous month.

Shortly before the start of trading, the Federal Reserve is scheduled to release its report on industrial production in the month of April. Industrial production is expected to climb by 0.6 percent.

After ending Monday's trading modestly higher, stocks showed a significant move back to the downside during trading on Tuesday. The major averages pulled back sharply in morning trading and remained firmly negative throughout the afternoon.

The major averages regained some ground going into the close but still ended the day notably lower. Dow slumped 193.00 points or 0.8 percent to 24,706.41, the Nasdaq fell 59.69 points or 0.8 percent to 7,351.63 and the S&P 500 slid 18.68 points or 0.7 percent to 2,711.45.

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Wednesday. Japan's Nikkei 225 Index fell by 0.4 percent, while Hong Kong's Hang Seng Index edged down by 0.1 percent.

Meanwhile, the major European markets have moved modestly higher on the day. While the German DAX Index has risen by 0.3 percent, the U.K.'s FTSE 100 Index and the French CAC 40 Index are both up by 0.1 percent.

In commodities trading, crude oil futures are slipping $0.26 to $71.05 a barrel after rising $0.35 to $71.31 a barrel on Tuesday. Meanwhile, after plunging $27.90 to $1,290.30 an ounce in the previous session, gold futures are falling $3.80 to $1,286.50 an ounce.

On the currency front, the U.S. dollar is trading at 110.11 yen compared to the 110.35 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is valued at $1.1768 compared to yesterday's $1.1838.

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