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Mixed Earnings News May Lead To Choppy Trading On Wall Street

The major U.S. index futures are pointing to a mixed opening on Tuesday following the weakness seen in the previous session.

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.

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.

Concerns about the global economic outlook contributed to the initial weakness on Wall Street following the release of disappointing Chinese trade data.

Data from China's General Administration of Customs showed exports tumbled by 4.4 percent year-over-year in December, reflecting the biggest drop in two years. Economists had expected exports to increase by 3 percent.

The report also said Chinese imports plunged by 7.6 percent in December compared to the same month a year ago, defying expectations for a 5 percent jump.

ING Greater China Economist Iris Pang said the contraction in Chinese imports and exports "is likely to continue into 2019 due to falling foreign demand, including demand for Chinese-made electronic products."

Selling pressure waned shortly after the start of trading, however, as traders seemed wary of missing out on further upside following the advance seen in recent sessions.

A lack of major U.S. economic data also kept some traders on the sidelines along with uncertainty about the impact of the ongoing government shutdown.

Utilities stocks showed a substantial move to the downside on the day, dragging the Dow Jones Utilities Average down by 2.6 percent.

PG&E Corp. (PCG) posted a steep loss after the utility said it plans to file for bankruptcy due to potential liabilities resulting from the 2017 and 2018 Northern California wildfires.

Significant weakness was also visible among pharmaceutical stocks, as reflected by the 1.7 percent drop by the NYSE Arca Pharmaceutical Index.

Biotechnology, semiconductor, and gold stocks also saw considerable weakness on the day, while banking stocks moved to the upside.

Within the banking sector, Citigroup (C) posted a strong gain after reporting fourth quarter earnings that exceeded analyst estimates.

Commodity, Currency Markets

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.

Asia

Asian stocks finished broadly higher on Tuesday after the U.S. earnings season began on a positive note and China signaled more supportive measures in the near term to counter slowing growth.

Investors also looked ahead to a vote on British Prime Minister Theresa May's Brexit deal later in the day. It is widely expected that May's Brexit proposal will be defeated in parliament.

China's Shanghai Composite Index ended up 34.58 points or 1.4 percent at 2,570.34 after China said it would aim to achieve "a good start" in the first quarter for the economy. Hong Kong's Hang Seng Index soared 531.96 points or 2 percent to 26,830.29.

Japanese shares climbed to close near a one-month high as the yen dropped against the dollar, helping exporters' shares. The Nikkei 225 Index advanced 195.59 points or 1 percent to 20,555.29, its highest level since December 19th.

The broader Topix closed 0.9 percent higher at 1,542.72 as traders returned to their desks after a long holiday weekend.

Electronic makers led the surge, with Tokyo Electron, Kyocera Corp and TDK Corp jumping 3-4 percent. Nintendo soared 4.6 percent on buzz that the company could be Apple's next acquisition target.

Australian markets rose notably, led by banks after Citigroup reported fourth quarter earnings that beat analysts' estimates.

The benchmark S&P/ASX 200 Index climbed 41.20 points or 0.7 percent to 5,814.60, while the broader All Ordinaries Index ended up 38.60 points or 0.7 percent at 5,871.80.

Banks ANZ and Commonwealth rose 0.7 percent and 1 percent, respectively, and energy stocks Woodside Petroleum and Santos rose over 1 percent despite a 2 percent slump in crude oil prices overnight.

Coal miner Whitehaven Coal jumped 3.7 percent. Adult education provider Navitas soared 12.9 percent after saying it would back a sweetened A$2.09 billion ($1.51 billion) buyout offer from a consortium of its founder Red Jones and private equity firm BGH.

Shares of Hub24 rallied 6 percent. The investment and superannuation platform announced record net inflows of A$1.5 billion during the December quarter, up 167.4 percent from the prior corresponding period.

Seoul stocks rose sharply to end near a six-week closing high after reports suggested that Beijing will cut taxes and keep monetary policy flexible to prop up a slowing economy.

The benchmark Kospi jumped 32.66 points or 1.6 percent to close at 2,097.18. Tech heavyweights Samsung Electronics and SK Hynix rallied 2.6 percent and 3.1 percent, respectively.

Europe

European stocks are turning in a lackluster performance on Tuesday as traders digest mixed earnings news from the U.S. while looking ahead to the Brexit vote in the U.K. parliament later today.

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.

Swedish telecoms company Millicom has jumped after it received a preliminary, highly conditional, non-binding proposal from Liberty Latin America regarding a possible transaction.

Deutsche Post has also rallied in Frankfurt after it issued a statement with comments on a report about upcoming pricing regulation.

Nordex Group shares have also jumped. The company said it received new orders for more than 4.75 GW in 2018, up over 73 percent compared to the previous year.

Meanwhile, chocolate maker Lindt & Spruengli has fallen after the company warned the market environment remains "very challenging".

Bookmakers Paddy Power Betfair, William Hil and GVC Holdings have also slid on fears that a legal opinion from the U.S. Department of Justice made public on Monday could threaten the viability of online gambling.

Sub-prime lender Provident Financial has moved sharply lower after issuing a profit warning, citing loan impairments at its credit card business Vanquis Bank.

U.S. Economic Reports

A report released by the Labor Department on Tuesday showed a modest decrease in U.S. 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.

Minneapolis Federal Reserve President Neel Kashkari is scheduled to speak about the regional economy at an economic summit in Rochester, Minnesota, at 11:30 am ET.

At 1 pm ET, Dallas Fed President Robert Kaplan is due to participate in a moderated Q&A at the Plano Chamber of Commerce Annual Meeting in Plano, Texas.

Kansas City Fed President Esther George is also scheduled to deliver a speech about the economic and monetary policy outlook in Kansas City, Missouri, at 1 pm ET.

Stocks In Focus

Shares of Sherwin-Williams (SHW) are likely to come under pressure after the paints company lowered its full-year earnings forecast due partly to weaker than expected fourth quarter sales growth.

Delta Air Lines (DAL) may also move to the downside after the airline reported better than expected fourth quarter earnings but provided disappointing guidance.

Shares of Synovus Financial (SNV) could also see initial weakness after the financial services provider reported fourth quarter results that missed analyst estimates on both the top and bottom lines.

On the other hand, shares of Dave & Buster's (PLAY) are moving notably higher in pre-market trading after the restaurant chain raised its full-year guidance.

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