The major U.S. index futures are pointing to a sharply higher opening on Tuesday ahead of the Presidential election. Although the victor is going to be confronted with a plethora of problems, including an ailing economy, traders seem to be looking forward with optimism over a new presidential term. Commodity prices are advancing and could lend support to the commodity space. Additionally, positive earnings from companies such as MasterCard (MA) may also infuse some positive energy in the market. The Dow Industrials is trading closer to a critical support, the violation of which could lead to some meaningful near-term upside. Nevertheless, underlying caution could lead to volatility in the session.
U.S. stocks showed a lack of direction throughout Monday's trading, with the Dow Industrials and the S&P 500 Index moving back and forth in a narrow range before ending the session on a mixed note. Caution prevailed ahead of the U.S. presidential election even as evidence mounted regarding the sorry state of affairs of the economy. Auto sales slumped, while the Institute for Supply Management's survey showed that the manufacturing sector contracted at a much faster pace than had been anticipated.
The Dow Industrials ended down 5.18 points or 0.06% at 9,320 and the S&P 500 Index slid 2.45 points or 0.25% to 966. Meanwhile, the Nasdaq Composite ignored some early weakness and recovered to trade in positive territory for much of the session before showing some volatility in late trading. The technology-weighted index moved decisively into positive territory in the last half an hour of trading to close up 5.38 points or 0.31% at 1,726.
Home Depot (HD) led the Dow lower, with a drop of 5.81%. The other notable decliners included Bank of America (BAC) (down 2.32%), Disney (DIS) (down 3.36%), General Motors (GM) (down 2.42%), Intel (INTC) (down 2.44%) and Merck (MRK) (down 3.17%). However, Alcoa (AA) advanced 3.30% and American Express (AXP) gained close to 3%. Citigroup (C), Caterpillar (CAT), AT&T (T), Verizon (VZ) and Coca-Cola (KO) also advanced strongly.
Among the sector indexes, the S&P Retail Index slipped 3.62% and the Philadelphia Housing Sector Index receded 1.71%. While the Amex Oil Index receded 2.18%, the Philadelphia Oil Service Sector Index declined 2.64%. On the other hand, the Amex Biotechnology Index rose 1.49% and the Amex Airline Index jumped 5.69%. In the technology space, the Amex Disk Drive Index rallied 2.30% and the Amex Hardware Index climbed 1.98%, while the Amex Networking Index, the Amex Internet Holders Index and the Philadelphia Semiconductor Index fell 1.69% 0.83% and 0.99%, respectively.
Although the downside momentum for the markets has waned with last week's double-digit rally of the markets, there is still no assurance that a trend reversal has taken place. Trading continues to have an element of volatility. The Dow Industrials has climbed to towards the upper bound of its 1-month trading range. If it convincingly breaks above 9,331, the index could move into its next resistance zone between 9,331 and 10,819. On the downside, the index has support around 8,145.
The ISM's survey showed that the manufacturing index slumped to 38.9 in November from 43.5 in October, marking the lowest reading since September 1982. Painting a very gloomy picture, the export orders index fell 11 points to 41. Exports, which were thus far supporting the manufacturing sector, are also showing signs of crackling under pressure. The new orders, production and employment indexes declined sharply, while the prices paid index also showed a sharp contraction.
Commenting on the report, Commerzbank said the current downswing is now shaping up to something resembling the double-dip recession of 1980-82, given the fact that the ISM's index dropped below the lows reached during the two most recessions of 2001 and 1990/91.
Meanwhile, the Commerce Department said construction spending declined by a smaller-than-expected 0.3% in September. Spending on private constructions edged up 0.1%. Residential construction spending declined 1.3% as an increase in renovations and multi-family construction partly offset a sharp decline in new single-family construction. Meanwhile non-residential construction spending rose 1.2%. Spending on public constructions declined by 1.3%. Sales released by the automakers showed that motor vehicle sales came in at an anemic 7.9 million annualized rate, with domestic motor vehicle sales running at their lowest rate since 1983.
Currency, Commodity Markets
Crude oil futures are trading up $0.86 at $64.77 a barrel after the commodity fell $2.30 to $63.91 a barrel in the previous session. Gold futures, which rose $8.60 to $726.80 an ounce on Monday, are currently gaining $16.90 to $743.70 an ounce.
On the currency front, the U.S. dollar is trading at 99.348 yen compared to 99.125 yen it fetched at the close of New York trading on Monday. Against the euro, the dollar is currently valued at $1.2825 compared to yesterday's $1.2639.
Asia
Stock markets across the Asia-Pacific region closed mixed on Tuesday ahead of the U.S. presidential election. Japanese stocks surged after the market remained closed for a holiday on Monday, but the Australian market closed slightly lower after the nation's central bank cut interest rates. Oil prices fell below $63 a barrel Tuesday in Asia on renewed fears of an economic recession.
Japan's Nikkei 225 average opened higher and rose further in early trading before moving sideways for the rest of the session. The index closed up 537.62 points or 6.27% at 9,115. The Japanese markets were closed on Monday for a public holiday.
On the economic front, total cash earnings in Japan inched higher by 0.1% year-over-year in September, slightly lower than analysts' expectation for a 0.2% annual increase, but remained flat compared to August Stocks gained across the board. Among exporters, Toyota Motor climbed 3.2%, Hitachi surged 7.3%, and Sony jumped 6.5%. Panasonic gained 6.8% and Sanyo soared 34.5% following reports of a possible takeover of Sanyo by Panasonic. On the other hand, Nissan sank 11.0% after the automaker cut its dividend and profit target.
Toyota said that its U.S. auto sales slid 23% year-over-year in October, while Nissan reported a 33% drop in sales and Honda recorded a 28% drop in sales. Nissan more than halved its profit outlook for the full year.
South Korea's Kospi showed a considerable degree of volatility in the morning session before advancing solidly in the afternoon. The KOSPI closed up 24.3 points or 2.2% at 1,153.
The market closed higher for the fourth consecutive session after the central bank announced a $30 billion currency swap deal with the U.S. Federal Reserve on Thursday. On Monday, the Finance Ministry unveiled a sweeping economic stimulus package worth 14 trillion won, which includes a 10 trillion won budget increase for next year and diverse deregulatory moves for the slumping construction sector. The package came in addition to 19 trillion won worth of tax cuts unveiled earlier, bringing the total for economic relief measures to 33 trillion won.
Builders benefited from the government's economic stimulus plan. Daewoo Engineering & Construction jumped by its daily limit of 14.8% and Kumho Industry surged up by its daily limit.
Financial stocks also closed higher. Woori Finance Holdings soared 14.9%, its daily limit, while Shinhan Financial Group gained 11.0%. Bucking the trend, steel and tech exporters closed lower. Top steel maker POSCO plunged 4.2% and tech heavyweight LG Electronics lost 2.3%.
The Chinese stock market closed lower for the third consecutive trading session. Worries about an economic slowdown weighed on investor sentiment. Metals stocks slid on news of output cuts due to slowing demand. The benchmark Shanghai Composite Index lost 13.01 points or 0.76% to close at a 26-month low of 1,707.
Hong Kong's Hang Seng index traded in negative territory in the morning before recovering in the afternoon. Although stocks showed volatility thereafter, the index ended up 54.6 points or 0.8% at 6,861.
Among market leaders, HSBC Holdings edged up 0.1% and China Mobile advanced 0.9%. Financial stocks also advanced. However, China Railway Construction plunged 18.5% after the company said that the Nigerian government has temporarily suspended its railway project in Nigeria. Offshore oil producer CNOOC tumbled 5.5%, Sinopec fell 1.3%, and PetroChina lost 2.5%.
Australia's All Ordinaries opened unchanged, but it receded in early trading. Thereafter, the index recovered gradually over the course of trading before moving into positive territory by late trading after the Australian central bank cut interest rates by a larger-than-expected 75 basis points to 5.25%. Nevertheless, the index dipped again to close down 3.2 points, or 0.1%, at 4,170.
The major banks and retailers closed mixed, while softer metals prices weighed down on big miners. Index leader BHP Billiton fell 2.6% and Rio Tinto shed 2.8%. Gold stocks closed mixed amid weaker gold prices in Sydney.
Building products supplier James Hardie Industries jumped 3.5% after the company said that it would suspend production at two of its plants in the United States due to the downturn in the local housing industry. Europe
The major European markets are trading higher on Tuesday, with the German DAX Index and the U.K.'s FTSE 100 Index are gaining 1.61% and 1.79%, respectively. Meanwhile, the French CAC 40 Index is gaining 2.22%.
Swiss investment bank UBS (UBS) reported that its third quarter net income was 296 million Swiss francs, helped by gains of 2.2 billion francs on its own debt and a tax credit. However, the bank said fourth quarter results are likely to be impacted by a possible reversal of own credit gains and a loss on the equity in the fund to be controlled by the Swiss National Bank.
Eurostat, the European Commission's statistical arm reported that producer prices in the euro area declined by 0.2% month-over-month in September. In August, producer prices declined by 0.5%. Annually, producer prices rose by 7.9%.
U.S. Economic Reports
The Commerce Department is due to release its report on factory goods orders for September at 10 AM ET on Tuesday. Orders for manufactured goods are likely to have decreased 0.8% in the month.
In August, new orders for manufactured goods fell 4% to $444.4 billion, which marked the biggest drop since October 2006. The weakness was primarily due to a 9.1% drop in transportation equipment orders, which dragged down the durable goods orders by 4.8%. While shipments fell 3.5%, unfilled orders edged up 0.4%. Inventories improved 0.6% during the month.
Meanwhile, the durables goods orders for September released last week showed a 0.8% increase in orders for goods that are designed to last for more than 3 years. The increase was mainly due to a jump in civilian aircraft and defense orders. Stripping off transportation orders, new orders fell 1.1%. Although core capital goods orders declined 1.4%, shipments of this category of goods rose 2%.
Earnings
Emerson Electric (EMR) reported that its third quarter earnings rose to 88 cents per share from 78 cents per share last year. Net sales increased 11% to $6.03 billion. Analysts, on average, estimated earnings of 86 cents per share on sales of $6.71 billion.
PPL (PPL) said its third quarter earnings declined to 54 cents per share from 84 cents per share in the year-ago period. On an ongoing basis, the company reported earnings of 45 cents per share, lower than 72 cents per share last year. Operating revenues climbed to $2.98 billion from $1.78 billion last year. Analysts, on average, estimated earnings of 60 cents per share on revenues of $1.67 billion. The company lowered its 2010 earnings per share estimate to $3.60-$4.20. For 2009, the company estimated earnings of $1.60-$1.90 per share
Archer Daniels Midland's (ADM) first quarter net sales rose 65% to $21.16 billion. The company's earnings per share surged up 140% to $1.63 per share. Analysts estimated earnings of 69 cents per share on revenues of $15.98 billion.
Autodesk (ADSK) announced that preliminary results for the third quarter, expecting revenues in the range of $604-$607 million. The company estimates adjusted earnings in the range of 53-55 cents per share. Analysts estimate earnings of 55 cents per share on revenues of $623.75 million.
Stocks in Focus
Marvell Technology (MRVL) could come under selling pressure after it released preliminary third quarter results, expecting net revenues to decline 6%-7% from the second quarter revenues of $843 million. The new guidance range translates to revenues of $784-$792 million, lower than its earlier estimate of $860-$880 million. The company attributed the downside to slowing worldwide economic growth.
Anadarko Petroleum (APC) is expected to see some strength after it said its third quarter income from continuing operations was $4.62 per share, including one-time items that boosted earnings by $3 per share. The company's adjusted net income from continuing operations rose to $1.62 per share from 67 cents per share last year. Revenues increased to $6.15 billion from $3 billion in the year-ago period. Analysts expected earnings of $1.48 per share on revenues of $3.75 billion.
Automated Data Processing (ADP) may see weakness after it reduced its revenue growth forecast for 2009 to 2% to 3% from its earlier estimate of 7%-8%. The company confirmed its 2008 earnings from continuing operations growth guidance for 2008 of 10%-14%. The company also reported that its first quarter diluted earnings per share from continuing operations rose 20% to 54 cents per from 45 cents per share last year. Revenues rose 9.5% to $2.18 billion. The Street had estimated earnings of 50 cents per share on revenues of $2.14 billion.
Airline stocks Continental Airlines (CAL) and UAL Corp. (UAUA) are likely to react to their announcement of their October traffic results. UAL reported that its October passenger load factor was 81.3% compared to 81.8% last year, as traffic declined 9.7% and capacity fell 9.9%. Continental said its consolidated passenger load factor edged down 0.5 points to 79%.
Con-Way (CNW) could be in focus after the company said it would close 40 service centers by December in a bid to cut costs. The company noted that the freight handled at these locations would be redistributed among other locations. The company expects to reduce its workforce by 1%, while it expects to save $30 million to $40 million annually from the closures.
EOG Resources (EOG) may gain ground after it said its third quarter net income available to common shareholders surged up to $6.20 per share from 82 cents per share in the year-ago period. The recent quarter's results included an after-tax gain of $3.55 per share on the mark-to-market of financial commodity transactions. The company's adjusted non-GAAP net income available to common stockholders was $2.34 per share compared to 79 cents per share in the same quarter last year. Net operating revenues climbed sharply to $3.23 billion from $986.2 million in the year-ago period. The results exceeded the consensus estimates that called for earnings of $2.24 per share on revenues of $1.74 billion.
Mastercard (MA) could move to the upside after it reported third quarter adjusted earnings of $2.47 per share, ahead of the consensus estimate of $2.25 per share. Revenues were up 24% to $1.3 billion.
Pitney Bowes (PBI) may recede after it lowered its full year earnings estimate to $2.75-$2.82 per share from its earlier estimate of $2.80-$2.90 per share. The company also lowered its revenue growth estimate to 2%-4% from 6%-9%. The company also reported that its third quarter earnings declined to 47 cents per share from 58 cents per share last year despite revenues rising 2.6% to $1.55 billion. Analysts, on average, estimated earnings of 70 cents per share on revenues of $1.6 billion.
Principal Financial (PFG) rallied in Monday's after hours session after it reported third quarter operating earnings of 96 cents per share that beat the consensus estimate of 92 cents per share despite declining from $1.18 per share in the year-ago period. Operating revenues slipped to $2.75 billion from $2.94 billion last year. The Street estimated revenues of $2.77 billion.
Viacom (VIA) is likely to be in focus after it said its third quarter net earnings declined to 65 cents per share from 96 cents per share last year. However, revenues rose 4% to $3.4 billion, ahead of the consensus estimate of $3.3 billion.
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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.