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Stocks May Open Higher On Upbeat Earnings, Economic News - U.S. Commentary


Stocks are likely to move to the upside in early trading on Monday, adding to the strong gains posted last week. The major index futures are currently pointing to a higher open for the markets, with the Dow futures up by 163 points.

Early buying interest may be generated in reaction to upbeat quarterly results from financial giant Bank of America (BAC), which reported first quarter earnings that beat analyst estimates on strong loan growth.

The markets may also benefit from the release of a Commerce Department report showing stronger than expected retail sales growth in the month of March.

The report said retail sales climbed by 0.6 percent in March after edging down by 0.1 percent in February. Economists had expected retail sales to rise by 0.4 percent.

Excluding a rebound in auto sales, retail sales edged up by 0.2 percent in March, matching the uptick seen in the previous month as well as economist estimates.

Geopolitical concerns may keep trading activity somewhat subdued, however, as traders digest the weekend's U.S.-led airstrikes against Syria.

Reports of the U.S. imposing new economic sanctions on Russia and a tweet from President Donald Trump accusing China of currency devaluation may also limit any upside for the markets.

Shortly after the start of trading, the National Association of Home Builders is scheduled to release its report on homebuilder confidence in the month of April. The housing market index is expected to come in unchanged in April after edging down to 70 in March.

The Commerce Department is also due to release its report on business inventories in the month of February. Business inventories are expected to climb by 0.6 percent.

After failing to sustain an initial upward move, stocks moved mostly lower over the course of the trading session on Friday. With the downturn on the day, the major averages partly offset the gains posted in the previous session.

The major averages climbed off their worst levels going into the close but still ended the day in the red. The Dow slid 122.91 points or 0.5 percent to 24,360.14, the Nasdaq dropped 33.60 points or 0.5 percent to 7,106.65 and the S&P 500 fell 7.69 points or 0.3 percent to 2,656.30.

Despite the pullback on the day, the major averages moved sharply higher for the week. The Nasdaq soared by 2.8 percent, while the S&P 500 and the Dow jumped by 2 percent and 1.8 percent, respectively.

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Monday. Japan's Nikkei 225 Index rose by 0.3 percent, while Hong Kong's Hang Seng Index tumbled by 1.6 percent.

Meanwhile, the major European markets have all moved to the downside on the day. While the U.K.'s FTSE 100 Index has fallen by 0.5 percent, the French CAC 40 Index and the German DAX Index are both down by 0.1 percent.

In commodities trading, crude oil futures are sliding $0.70 to $66.69 a barrel after rising $0.32 to $67.39 a barrel last Friday. Meanwhile, an ounce of gold is trading at $1,347.60, down $0.30 from the previous session's close of $1,347.90. On Friday, gold climbed $6.

On the currency front, the U.S. dollar is trading at 107.29 yen compared to the 107.35 yen it fetched at the close of New York trading on Friday. Against the euro, the dollar is valued at $1.2375 compared to last Friday's $1.2331.

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