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Stocks May Show A Lack Of Direction In Early Trading - U.S. Commentary


Stocks may show a lack of direction in early trading on Wednesday after ending the previous session modestly higher. The major index futures are currently pointing to a roughly flat open for the markets, with the Dow futures down by just 7 points.

Traders may be reluctant to make significant moves amid lingering concerns about the ongoing trade dispute between the U.S. and China.

On the U.S. economic front, the Labor Department released a report unexpectedly showing a modest drop in producer prices in the month of August.

The Labor Department said its producer price index for final demand edged down by 0.1 percent in August after coming in unchanged in July. Economists had expected prices to rise by 0.2 percent.

Excluding food and energy prices, core producer prices still edged down by 0.1 percent in August following a 0.1 percent uptick in July. Core prices had been expected to increase by 0.2 percent.

Later in the day, trading may be impacted by reaction to the release of the Federal Reserve's Beige Book.

The Beige Book, a compilation of anecdotal evidence on economic conditions in the twelve Fed districts, may provide further clues about the outlook for interest rates.

After an initial move to the downside, stocks turned higher over the course of the trading session on Tuesday. The major averages bounced off their early lows and ended the day in positive territory.

The Dow rose 113.99 points or 0.4 percent to 25,971.06, the Nasdaq climbed 48.31 points or 0.6 percent to 7,972.47 and the S&P 500 advanced 10.76 points or 0.4 percent to 2,887.89.

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Wednesday. Japan's Nikkei 225 Index and Hong Kong's Hang Seng Index both fell by 0.3 percent.

Meanwhile, the major European markets have moved to the upside on the day. While the French CAC 40 Index has climbed by 0.6 percent, the German DAX Index and the U.K.'s FTSE 100 Index are both up by 0.2 percent.

In commodities trading, crude oil futures are climbing $0.76 to $70.01 a barrel after spiking $1.71 to $69.25 a barrel on Tuesday. Meanwhile, after rising $2.40 to $1,202.20 an ounce in the previous session, gold futures are falling $2.60 to $1,199.60 an ounce.

On the currency front, the U.S. dollar is trading at 111.35 yen compared to the 111.63 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is valued at $1.1592 compared to yesterday's $1.1606.

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