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Stocks May Show A Lack Of Direction On Mixed Earnings News - U.S. Commentary


After ending the previous session mostly lower, stocks may show a lack of direction in early trading on Tuesday. The major index futures are currently pointing to a mixed open for the markets, with the Dow futures down by 21 points but the Nasdaq futures up by 25 points.

Mixed earnings news from financial giants JPMorgan Chase (JPM) and Wells Fargo (WFC) may lead to choppy trading on Wall Street.

Shares of JPMorgan are moving notably lower in pre-market trading after the company reported fourth quarter earnings that missed analyst estimates on weaker than expected bond-trading revenue.

Meanwhile, Wells Fargo reported better than expected fourth quarter earnings, although its revenues for the quarter came in below expectations.

Traders may also weigh concerns about the ongoing government shutdown in the U.S. against news of Chinese efforts to stimulate the sluggish economy.

On the U.S. economic front, a report released by the Labor Department showed a modest decrease in producer prices in the month of December,

The Labor Department said its producer price index for final demand dipped by 0.2 percent in December after inching up by 0.1 percent in November. Economists had expected prices to slip by 0.1 percent.

Excluding food and energy prices, core producer prices edged down by 0.1 percent in December after climbing by 0.3 percent in November. Core prices had been expected to rise by 0.2 percent.

A separate report released by the Federal Reserve Bank of New York showed New York manufacturing activity grew at its slowest pace in over a year in the month of January.

The New York Fed said its general business conditions index slumped to 3.9 in January after tumbling to a revised 11.5 in December.

A positive reading still indicates growth, although economists had expected the index to show a much more modest decrease to 10.8.

After coming under pressure early in the session, stocks regained ground over the course of the trading day on Monday but remained mostly negative. With the drop on the day, the major averages partly offset the strong gains posted last week.

The major averages ended the day firmly in negative territory. The Dow fell 86.11 points or 0.4 percent to 23,909.84, the Nasdaq slid 65.56 points or 0.9 percent to 6,905.92 and the S&P 500 dropped 13.65 points or 0.5 percent to 2,582.61.

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Tuesday. Japan's Nikkei 225 Index jumped by 1 percent, while Hong Kong's Hang Seng Index surged up by 2 percent.

Meanwhile, the major European markets are turning in a mixed performance on the day. While the German DAX Index is down by 0.3 percent, the U.K.'s FTSE 100 Index is just above the unchanged line and the French CAC 40 Index is up by 0.1 percent.

In commodities trading, crude oil futures are climbing $0.72 to $51.23 barrel after slumping $1.08 to $50.51 a barrel on Monday. Meanwhile, after rising $1.80 to $1,291.30 ounce in the previous session, gold futures are unchanged.

On the currency front, the U.S. dollar is trading at 108.39 yen compared to the 108.16 yen it fetched at the close of New York trading on Monday. Against the euro, the dollar is valued at $1.1436 compared to yesterday's $1.1469.

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