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Stocks May Continue To Show A Lack Of Direction

The major U.S. index futures are pointing to a roughly flat opening on Wednesday, as stocks may continue to show a lack of direction after closing mixed for two consecutive sessions. Another quiet day on the U.S. economic front may keep some traders on the sidelines ahead of the release of closely watched reports on producer prices and retail sales on Friday.

Traders are likely to keep an eye on a press conference by President-elect Donald Trump scheduled to begin at 11 am ET. The press conference, Trump's first since late July, comes amid reports that the Russian government has collected compromising information about the incoming president.

Stocks turned in another relatively lackluster performance during trading on Tuesday before eventually ending the day mixed. The major averages closed on opposite sides of the unchanged line for the second consecutive session.

The tech-heavy Nasdaq closed higher for the sixth straight session, climbing 20.00 points or 0.4 percent to a new record closing high of 5,551.82. The S&P 500 ended the day unchanged at 2,269.90, while the Dow dipped 31.85 points or 0.2 percent to 19,855.53.

The choppy trading on Wall Street came as traders seemed reluctant to make significant moves amid uncertainty about the near-term outlook for the markets.

Traders also continue to keep an eye on the performance by the Dow, which climbed within striking distance of 20,000 but was once again unable to break through that key psychological level.

The lackluster performance also came amid a relatively quiet day on the U.S. economic front, with traders looking ahead to reports on producer prices and retail sales due on Friday.

Financial giants Bank of America (BAC), JPMorgan (JPM) and Wells Fargo (WFC) are also due to report their quarterly results later this week.

While many of the major sectors ended the day showing only modest moves, steel stocks showed a substantial move to the upside. The NYSE Arca Steel Index surged up by 4.9 percent to its best closing level in almost a month.

Considerable strength was also visible among airline stocks, as reflected by the 2.4 percent gain posted by the NYSE Arca Airline Index. The rebound by the index came after it ended the previous session at a one-month closing low.

On the other hand, oil service stocks came under pressure as the day progressed amid another steep drop by the price of crude oil. Reflecting the weakness in the oil service sector, the Philadelphia Oil Service Index slumped by 1.5 percent.

Commodity, Currency Markets

Crude oil futures are climbing $0.29 to $51.11 a barrel after tumbling $1.14 to $50.82 a barrel on Tuesday. Gold futures, which inched up $0.60 to $1,185.50 an ounce in the previous session, are rising $2.30 to $1,187.80 an ounce.

On the currency front, the U.S. dollar is trading at 116.14 yen compared to the 115.77 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is valued at $1.0508 compared to yesterday's $1.0554


Most Asian stocks rose on Wednesday even as the recent oil rally appeared to run out of steam and the dollar edged higher against a basket of currencies ahead of U.S. President-elect Donald Trump's press conference later in the day.

Trump's proposed tax cuts and spending plans could boost U.S. and global growth, while uncertainty about his trade policies adds to the risks, the World Bank said in its latest outlook on the global economy.

Japanese shares eked out modest gains as a weaker yen boosted exporters. The Nikkei 225 Index rose 63.23 points or 0.33 percent to 19,364.67, snapping a three-day losing streak. The broader Topix index closed 0.52 percent higher at 1,550.40.

Toshiba soared 4.3 percent after its main creditors decided to continue providing financial support to the struggling firm.

Australian shares also saw modest strength as resources stocks rallied on higher commodity prices. The benchmark S&P/ASX 200 Index edged up 10.80 points or 0.10 percent to finish at 5,771.50, while the broader All Ordinaries index closed 10.70 points or 0.18 percent higher at 5,823.70.

Miners BHP Billiton, Rio Tinto and Fortescue Metals Group climbed 3-4 percent after iron ore and copper prices surged amid further signs of a pick-up in the Chinese economy and forecasts of strong growth in the U.S.

Gold Miners Newcrest and Northern Star rallied 1-2 percent as gold hovered near six-week high on safe-haven demand amid fears of a "hard" Brexit and policy uncertainty in the U.S.

ANZ Bank shed 0.3 percent after announcing the sale of its New Zealand-focused asset finance business UDC Finance to Chinese logistics company HNA Group for A$626 million. Bellamy's Australia plunged almost 20 percent as shares in the infant formula maker returned to trade after a nearly month in suspension.

Meanwhile, China's Shanghai Composite Index bucked the regional trend to end 24.92 points or 0.79 percent lower at 3,136.75 as the yuan held largely unchanged against the dollar and investors waited for cues from Trump's press conference. Hong Kong's Hang Seng Index climbed 190.50 points or 0.84 percent to 22,935.35.


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

Supermarket giant Sainsbury has surged higher in London after posting better-than-expected sales for the third quarter.

Volkswagen has also rallied after the German automaker confirmed it is closing in on a deal to settle a U.S. probe into the rigging of diesel-powered cars to cheat emissions tests.

Meanwhile, engineering firm Cobham has plunged after its group trading profit for the year ended December 31st fell short of guidance.

On a light day on the economic front, official data showed that U.K. industrial production recovered at a faster than expected pace in November.

Industrial output climbed 2.1 percent in November from October, when production eased 1.1 percent. Economists had forecast output to rise 1 percent.

A separate report showed the U.K. visible trade deficit widened more than expected in November.

U.S. Economic Reports

At 10:30 am ET, the Energy Information Administration is scheduled to release its weekly report on oil inventories. Crude oil inventories are expected to rise by about 1.2 million barrels in the week ended January 6th.

The Treasury Department is also scheduled to release the results of auction of $20 billion worth of ten-year notes at 1 pm ET.

Shortly afterward, New York Federal Reserve President William Dudley is due to speak about banking culture from a regulatory perspective at the Culture Imperative -- An Interbank Symposium in New York.

Stocks in Focus

Shares of SuperValu (SVU) may come under pressure in early trading after the supermarket operator reported third quarter adjusted earnings that came in well below analyst estimates.

NOVADAQ Technologies (NVDQ) is also moving sharply lower in pre-market trading after forecasting fourth quarter revenues of $20.2 million and providing revenue guidance for 2017.

Jewelry retailer Signet Jewelers (SIG) said its same store sales fell 4.6 percent during the holiday season. The company subsequently lowered the high end of its fourth quarter earnings guidance.

Meanwhile, shares of MSC Industrial (MSM) may see early strength after the company reported better than expected first quarter results and provided upbeat guidance.

Medical device maker Stryker (SYK) said it expects 2016 adjusted earnings at the high end of its previously stated range of $5.75 to $5.80 per share.

Southwest Airlines (LUV) announced the promotion of Thomas Nealon as president and Michael Van de Ven as chief operating officer. The changes are effective immediately.

by RTT Staff Writer

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