Market Analysis

The major U.S. index futures are pointing to a higher opening on Tuesday, with sentiment remaining cautiously optimistic ahead of the release of the results of a couple of house price surveys and a consumer confidence survey. Risky assets are seeing a bounce from their recent lackluster performance. The results of S&P/Case-Shiller home price survey showed that house prices rose in line with expectations in July. Traders may also look ahead to the results of the Conference Board’s consumer confidence survey. That said, earnings worries may abound as Dow component Caterpillar made a negative pre-announcement.

Amid a lack of major catalysts, U.S. stocks turned in a lackluster performance on Monday, ending modestly to moderately lower.

The major U.S. averages opened lower and moved mostly sideways. Although some buying emerged in late afternoon trading, it was not strong enough to push the averages decisively above the unchanged line. Consequently, the major averages ended lower for the session.

The Dow Industrials ended down 20.55 points or 0.15 percent at 13,559 and the S&P closed 3.26 points or 0.22 percent lower at 1,457, while the Nasdaq Composite Index closed at 3,161, down 19.18 points or 0.60 percent.

Eighteen of the thirty Dow components closed lower, with Hewlett-Packard (HPQ), DuPont (DD), Intel (INTC) and Microsoft (MSFT) declining sharply. On the other hand, Pfizer (PFE) and JP Morgan Chase (JPM) advanced.

Biotechnology, gold, semiconductor, basic material and oil service were among the biggest decliners of the session. Meanwhile, railroad, trucking, and utility stocks advanced.

Currency, Commodity Markets

Crude oil futures are rising $0.88 to $92.81 a barrel after slipping $0.96 to $91.93 a barrel on Monday. Gold futures are currently rising $3.80 to $1,768.40 an ounce. In the previous session, gold fell $13.40 to $1,764.60 an ounce.

Among currencies, the U.S. dollar is trading at 77.76 yen compared to the 77.84 yen it fetched at the close of trading on Monday. Against the euro, the dollar is valued at $1.2939 compared to yesterday’s $1.2931.

Asia

The major Asian markets ended on a mixed note, as growth concerns continued to haunt investors due to the situation in Europe.

Japan’s Nikkei 225 average opened lower but recovered in late morning trading. After hovering in positive territory till late afternoon, the index fell into negative territory once again before recovering in late trading. The Nikkei 225 Index closed up 22.25 points or 0.25 percent at 9,092.

Financial, real estate, auto and paper stocks were among the advancers, while technology and other export stocks saw mixed sentiment.

Australia’s All Ordinaries languished below the unchanged line throughout the session before closing down 13.70 points or 0.31 percent at 4,396.

Most sectors retreated, led by material and consumer staple stocks. Miners Rio Tinto and BHP Billiton came under selling pressure.

Among the four major banks, ANZ and Westpac declined, while the Commonwealth Bank and National Australia Bank advanced.

Hong Kong’s Hang Seng Index closed at 20,699, up 3.98 points or 0.02 percent. At the same time, China’s Shanghai’s Composite Index, South Korea’s Kospi and Taiwan’s Weighted Average all closed lower.

On the economic front, a Bank of Japan report showed that its corporate service price index edged down 0.3 percent year-over-year in August. The drop was in line with expectations.

Meanwhile, the Conference Board's leading indicator for China's economic activity rose at the fastest pace in seven months in August. The leading economic index increased 1.7 percent month-over-month following a 0.6 percent increase in July.

Europe

European stocks are currently trading on a mixed note ahead of a slew of key economic data from the U.S.

In corporate news, Cairn Energy said it has sold an 8 percent stake in Cairn India for $910 million. Brewer Diageo confirmed that it is in talks to buy a stake in India’s United Spirits. Sanofi-Aventis revealed that it may trim 900 jobs in France by 2015.

The results of the German consumer confidence survey by GfK showed that Germany’s consumer confidence is set to remain unchanged in October. The forward looking consumer sentiment index is expected to come in at 5.9 in October, in line with expectations.

Meanwhile, French business confidence also remained unchanged in September, according to the results of a survey by statistical office INSEE. The headline synthetic indicator measuring business confidence was unchanged at 90 in September, while economists had expected a 1-point decline to 89.

U.S. Economic Reports

The Conference Board is scheduled to release its consumer confidence report for September at 10 am ET. The report, which is based on a survey of 5,000 U.S. households, is expected to show that the consumer confidence index rose to 64.8 in September.



In August, the consumer confidence index fell to 60.5 from 65.4 in July, dipping to the lowest level since late 2011. The present situation index remained almost unchanged at 45.8, while the expectations index declined sharply to 70.5.

The Federal House Finance Agency, or FHFA, is set to release its house price index for July at 10 am ET. The index is a weighted, repeat-sales index that measures average price changes of single-family houses in repeat sales or refinancings on the same properties. Economists expect a 0.8 percent increase by the house price index compared to a 0.7 percent increase in June.



A manufacturing index based on a survey by the Richmond Federal Reserve is due to released at 10 am ET. The index is expected to improve to -4 in September from -9 in August.

Stocks in Focus

At its investor meeting, Caterpillar (CAT) updated its 2015 guidance, with the company now expecting earnings of $12 to $18 per share and sales of $80 billion to $100 billion. This represents a reduction from its earlier earnings guidance of $15-$20 per share.

ONEOK (OKE) said it expects 2013 net income of $405 million to $455 million, up 19 percent from its 2012 earnings guidance of $345 million to $375 million. The company also said it expects to increase its net income by 20-25 percent annually between 2012 and 2015, driven by incremental earnings to ONEOK from the growth at ONEOK Partners.

RPM (RPM) announced that its Rust-Oleum group has acquired exterior wood deck and concrete restoration system maker Synta. Synta is expected to generate sales of over $40 million in the first year. The company did not disclose the terms of the deal.

Paychex (PAYX) reported first quarter earnings of 42 cents per share, up 2 percent year-over-year, and revenues of $578.2 million, up 3 percent. The earnings were in line, while the revenues were shy of estimates. The company reaffirmed its guidance of total service revenue growth of 5-6 percent and net income growth of 5-7 percent.

Red Hat (RHT) reported second quarter non-GAAP net income of 28 cents per share compared to 29 cents per share last year. Revenues rose 15 percent to $322.6 million. The results trailed estimates.

Copart (CPRT) and Jabil Circuit (JBL) are among the companies due to release their quarterly results after the markets close.