The major U.S. index futures are pointing to a modestly higher opening on Monday, with the major averages poised to rebounding from the previous session's slide. In the absence of economic data to digest, the markets may focus on earnings, which have so far been bordering on the positive. Commodity prices are pulling back slightly, reflecting apprehension among traders against the backdrop of their recent run up.
U.S. stocks snapped a 2-seession winning streak in the week ended October 23rd despite earnings largely coming in better than expected. Financial, biotechnology, transportation and airline stocks came under significant selling pressure.
Last Monday, the major averages advanced sharply, aided by strong earnings, with the Dow ending the session at a new closing high for the year. However, the markets largely ignored upbeat earnings on Tuesday and instead focused on a mixed housing market report and consequently, ended moderately lower.
Profit taking continued to weigh on the markets on Wednesday, as the major averages extended their declines. The equity market decline came amid a sharp rise in oil prices and the release of the Beige Book, which showed conditions are either stabilizing or modestly improving. Despite the release of a job market report that showed a bigger than expected increase in weekly jobless claims on Thursday, the markets advanced steadily throughout the session, ending notably higher. Turning a blind eye to strong earnings from some major companies and a fairly positive housing report, the major averages ended lower on Friday.
For the week, the Dow Industrials ended down 0.24% and the S&P 500 Index fell 0.74%, while the Nasdaq Composite Index lost 0.11%.
Among the sector indexes, the NYSE Arca Airline Index fell 7.03%, the NYSE Arca Biotechnology Index receded 5.79%, the Dow Jones Transportation Average declined 5.42% and the NYSE Arca Securities Broker/Dealer Index slipped 4.01%.
Currency, Commodity Futures
Crude oil futures are receding $0.26 to $80.24 a barrel after advancing for the fourth straight week in the week ended October 23rd, when oil rose over 1% to $80.50 a barrel. The November futures, which expired on Wednesday, rallied last Monday, rising over $1-a-barrel, only to recede on Tuesday, although moderately, as profit taking led to weakness following 8 straight sessions of gains.
The December futures, which began trading as the front-month contract on Wednesday, jumped by over $2-a-barrel, helped by a weakening dollar and the EIA's oil report, which showed a draw down in distillate and gasoline inventories.
Oil saw slight weakness on Thursday and fell further on Friday, as a rebounding dollar exerted downward pressure on the commodity.
Gold futures are currently trading down $2.20 at $1,054.20 an ounce. In the previous week, the precious metal gained $4.90 or 0.47% to $1,056.40 an ounce.
On the currency front, the U.S. dollar had a mixed week in the week ended October 23rd, ending stronger against the yen but weaker against the euro. The greenback rose 1.29% against the yen to 92.06 yen, while it fell 0.7% against the euro to $1.5008 per euro. The strength of the euro in the previous week reflected optimism that the global economy will rebound shortly.
Currently, the U.S. dollar is trading at 91.934 yen and is valued at $1.5019 versus the euro.
Asia
Most Asian markets ended Monday's session higher, with the exception of the Australian and Indonesian markets, while the New Zealand and Hong Kong markets remained closed.
Japan's Nikkei 225 average opened lower and showed modest weakness in early trading. Thereafter, the index rebounded and advanced strongly, hitting a high of 10,398 by early afternoon trading, although it gave back some of its gains and closed up 79.63 points or 0.77% at 10,363.
Exporters rallied along with the rally in the dollar, while financial and construction stocks also gained ground in the session. On the other hand, Chiyoda slumped 12.59%. Some resource, real estate ands paper stocks also came under selling pressure.
Meanwhile, Australia's All Ordinaries languished in negative territory throughout the session before closing down 27.10 points or 0.56% at 4,833. A majority of stocks declined in the session. Mining stocks ended lower across the board, while among the four major banks, Westpac rose, but the rest declined. Insurance and oil stocks also came under selling pressure.
South Korea's Kospi ignored a weak start and advanced in early trading before moving sideways thereafter. The index closed up 16.94 points or 1.03% at 1,657. The market received support from a report, showing that the South Korean economy expanded at its fastest rate in seven years. The domestic economy grew 2.9% quarter-over-quarter in the September quarter following 2.6% growth in the previous quarter. Annually, GDP rose 0.6% following a 2.2% decline in the June quarter.
Europe
After opening higher and showing volatility on Monday, the major European markets are currently showing notable strength. The French CAC 40 Index and the German DAX Index are rising 0.29% and 0.46%, respectively, while the U.K.'s FTSE 100 Index is moving up 0.22%. Utility, telecom, financial, pharma and chemical stocks are advancing strongly.
On the economic front, the GfK reported that its forward-looking consumer confidence index for November, indicating conditions for German consumers, fell to 4 in November from 4.2 in October. Economists had expected an increase by the index to 4.5. Among the three component indices, income expectations and the propensity to buy declined in October, while economic expectations improved again.
U.S. Economic News
The first reading of third quarter GDP, scheduled to be released on Thursday, is likely to be in the spotlight in the unfolding week. Traders may be keen to find out the magnitude of rebound staged by the economy, which was supported primarily by stimulus spending and the cash for clunkers program. Inventories are likely to be less of a drag in the third quarter relative to the second quarter, while private investment in machinery and buildings is expected to have declined at a slower rate than in the previous quarter. Meanwhile, government spending could have had a salubrious impact on GDP.
Other reports that could have a significant role in determining market direction are the S&P Case-Shiller home price index for August, the Commerce Department's new home sales report for September, the durable goods orders report for September, the Conference Board's consumer confidence index, the final reading of the Reuters/University of Michigan's consumer sentiment index for October, the ISM-Chicago purchasing managers' index for October, the Bureau of Economic Analysis' personal income and outlays report for September and the weekly jobless claims report.
Additionally, theoretical importance may be attached to the weekly oil inventory report and the Labor Department's employment cost index for third quarter. Traders may also closely watch the results of the Treasury auctions of the 5-year TIPS (due at 1 PM ET on Monday), 2-year notes (due at 1 PM ET on Tuesday), 5-year notes (due at 1 PM ET on Wednesday) and 7-year notes (due at 1 PM ET on Thursday).
The Conference Board's consumer confidence index is likely to increase slightly in October, given the ongoing improvement in the residential real estate market and the continued good showing by the equity markets. Additionally, gasoline prices pulled back slightly in October.
Going by Boeing's (BA) order books, which showed orders for 20 planes in September compared with 32 in August, durable goods orders are expected to see weakness in September. However, the weakness in transportation equipment orders could have been offset completely by strength in other sectors, as reflected by the ISM's new orders index, which came in at a robust 60.8 in the month. Moreover, industrial production as well as capacity utilization showed a continued recovery.
In line with the trend witnessed in existing home sales, new home sales are also expected to rise, with the increase likely to be driven by good affordability and the keenness of buyers looking to take advantage of the first time home buyer tax credit. New home sales are likely to rise for the sixth straight month to their highest level in a year.
Earnings
Sohu.com (SOHU) reported that its third quarter revenues rose 13% year-over-year to $136.6 million, slightly exceeding the $136.36 million estimate. On a non-GAAP basis, the company's earnings were 96 cents per share, ahead of the 89 cents per share consensus estimate.
Verizon (VZ) said its third quarter adjusted earnings fell to 60 cents per share from 66 cents per share in the year-ago period. Operating revenues rose 10.2% to $27.3 billion. The consensus estimates called for earnings of 59 cents per share on revenues of $27.17 billion.
RadioShack (RSH) reported a decline in its third quarter profits to 30 cents per share from 38 cents per share last year. Sales fell 3% to $990 million. Analysts estimated earnings of 31 cents per share on revenues of $961 million.
Stocks in Focus
Allergan (AGN) may be in focus after it announced that the U.S. District Court of Delaware has ruled in favor of the company in its patent infringement lawsuit against Exela PharmSci and Apotex, which were seeking to market purported generic versions of Allergan's drug ALPHAGAN.
Yahoo (YHOO) is also expected to be in focus after it announced that activist investor Carl Icahn has given up his seat on Yahoo's board. Icahn said in a letter to the board that he no longer believes that Yahoo needed an activist investor like him at this point in time. His resignation takes effect immediately.
Ethan Allen (ETH) may see some activity after the company said it has amended its existing 3-year senior secured revolving credit facility, increasing the line to $60 million by adding a $20 million loan commitment from Wells Fargo Retail Finance. The company also said its net sales for the September quarter totaled $136.2 million compared to $205.8 million last year. Analysts estimate sales of $150.42 million.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.