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Futures Pointing To Initial Rebound On Wall Street

The major U.S. index futures are pointing to a higher opening on Tuesday, with stocks likely to regain ground after ending the previous session significantly lower.

The upward momentum on Wall Street partly reflects a positive reaction to earnings news from 3M Co. (MMM), with the diversified manufacturer climbing by 2.9 percent in pre-market trading.

3M reported fourth quarter results that beat analyst estimates on both the top and bottom lines, although the company lowered its full-year 2019 guidance due in part to the current external environment.

A mixed reaction to earnings news from big-name companies like Pfizer (PFE) and Verizon (VZ) may limit early buying interest, however, as traders look ahead to the release of results from companies like Apple (AAPL) after the close of trading.

The Federal Reserve's impending monetary policy announcement on Wednesday may also keep some traders on the sidelines along with the upcoming release of the Labor Department's monthly jobs report on Friday.

Traders also continue to express uncertainty about trade talks between the U.S. and China after the Justice Department unsealed sweeping criminal charges against Chinese tech giant Huawei and its chief financial officer Meng Wanzhou.

Stocks came under pressure early in the trading session on Monday and remained firmly negative throughout the day. With the steep drop on the day, the Dow and the Nasdaq pulled back off their best closing levels in over a month.

The major averages ended the day significant lower but off their worst levels. The Dow tumbled 208.98 points or 0.8 percent to 24,528.22, the Nasdaq plunged 79.18 points or 1.1 percent to 7,085.68 and the S&P 500 slumped 20.91 points or 0.8 percent to 2,643.85.

A negative reaction to earnings news from Caterpillar (CAT) contributed to the early weakness on Wall Street, with the heavy equipment maker tumbling by 9.1 percent.

The steep drop by Caterpillar came after the company reported weaker than expected fourth quarter earnings and forecast full-year 2019 earnings below analyst estimates.

Caterpillar Chairman and CEO Jim Umpleby said the outlook "assumes a modest sales increase based on the fundamentals of our diverse end markets as well as the macroeconomic and geopolitical environment."

Graphics chip maker Nvidia (NVDA) also saw substantial weakness after lowering its fiscal fourth quarter revenue guidance due to deteriorating macroeconomic conditions, particularly in China.

Uncertainty also weighed on the markets ahead of key events later this week, including the release of the Labor Department's closely watched monthly jobs report on Friday.

The Federal Reserve's monetary policy decision on Wednesday is also likely to attract attention, although the central bank is widely expected to leave interest rates unchanged after last month's rate hike.

Traders are also likely to watch closely for any news regarding a new round of trade talks between U.S. and Chinese officials in Washington this week.

Oil service stocks showed a substantial move to the downside on the day, resulting in a 2.6 percent nosedive by the Philadelphia Oil Service Index. The sell-off by oil service stocks came amid a steep drop by the price of crude oil.

Concerns about the outlook for Chinese demand also contributed to considerable weakness among steel stocks, with the NYSE Arca Steel Index plunging by 2.8 percent.

Semiconductor, biotechnology, software, and healthcare stocks also saw significant weakness, reflecting broad based selling pressure on Wall Street.

Meanwhile, gold stocks bucked the downtrend, with the NYSE Arca Gold Bugs Index climbing by 1.5 percent amid an increase by the price of the precious metal.

Commodity, Currency Markets

Crude oil futures are rising $0.39 to $52.38 barrel after plunging $1.70 to $51.99 a barrel on Monday. Meanwhile, after climbing $5 to $1,303.10 ounce in the previous session, gold futures are up $4 at $1,307.10 an ounce.

On the currency front, the U.S. dollar is trading at 109.48 yen compared to the 109.35 yen it fetched at the close of New York trading on Monday. Against the euro, the dollar is valued at $1.1426 compared to yesterday's $1.1428.

Asia

Asian stocks ended mostly lower on Tuesday as disappointing guidance from heavy equipment maker Caterpillar and chipmaker Nvidia stoked fresh fears over falling demand in China.

Concerns over trade also dented sentiment after the U.S. Department of Justice unsealed sweeping criminal charges against Chinese tech giant Huawei and its chief financial officer Meng Wanzhou.

Chinese shares ended well off their day's lows as the country's state planner announced fresh measures to support growth.

The benchmark Shanghai Composite Index edged down 0.1 percent to 2,594.25, while Hong Kong's Hang Seng Index slipped 0.2 percent to close at 27,531.68.

Japanese shares ended little changed. The Nikkei 225 Index fluctuated before ending higher by 15.64 points or 0.1 percent at 20,664.64, led by defensive shares. The broader Topix closed 0.1 percent higher at 1,557.09.

Utility Tokyo Electric Power rallied 3.7 percent and bullet train operator Central Japan Railway added 1.4 percent.

Meanwhile, machinery makers such as Komatsu and Hitachi Construction Machinery fell 4-5 percent on concerns over Chinese demand.

Chip-related stocks also lost ground, with Advantest losing 4.6 percent and Screen Holdings plummeting 6 percent.

Australian markets declined as growth worries pulled down financials and energy firms. The benchmark S&P/ASX 200 Index dropped 31.40 points or 0.5 percent to 5,874.20 as traders returned to their desks after a public holiday on Monday. The broader All Ordinaries Index ended down 31.60 points or 0.5 percent at 5,939.50.

Woodside Petroleum, Santos, Origin Energy, Beach Energy and Oil Search dropped 1-4 percent after oil fell about 3 percent on Monday to post its biggest single-day percentage drop in a month amid concerns about global demand and data showing an increase in U.S. rigs drilling.

The big four banks as well as healthcare companies CSL and Cochlear all lost around 2 percent. In the technology sector, Afterpay Touch Group slumped 3.3 percent after warnings from Caterpillar and Nvidia.

Incitec Pivot plunged 7.9 percent. The industrial explosives maker said that unplanned outages at two of its plants would impact its fiscal 2019 earnings before interest and tax by A$45 million.

On the other hand, mining heavyweight BHP rose over 2 percent and Rio Tinto jumped 3.8 percent after Chinese iron ore futures hit a 16-month high on Monday following the deadly Minas Gerais mining disaster in Brazil. Smaller rival Fortescue Metals Group soared 4.8 percent.

Gold miners also posted strong gains after gold prices rose to a seven-month high on safe-haven demand. Evolution Mining jumped 5.9 percent and Northern Star rallied 3.1 percent.

Europe

European stocks have risen on Tuesday as investors shrug off trade tensions and look ahead to the U.S. Federal Reserve meeting and another debate on Brexit for directional cues.

Trade talks between the U.S. and China are likely to begin Wednesday in Washington despite the U.S. government filing criminal charges against Huawei.

Investors awaited a key Brexit vote in parliament, which could see MPs vote to force the government to seek an extension of Article 50 to avoid a catastrophic outcome.

While the German DAX Index has risen by 0.3 percent, the French CAC 40 Index and the U.K.'s FTSE 100 Index are jumping by 1.1 percent and 1.3 percent, respectively.

Hikma Pharma has moved notably higher in London after its U.S. unit launched Mitomycin for Injection, USP, 20mg and 40mg.

Sartorius has also jumped after the laboratory and pharmaceutical equipment provider reported that its fiscal 2018 net profit grew 21.9 percent to 175.6 million euros from 144.0 million euros last year.

Meanwhile, fund supermarket Hargreaves Lansdown has slumped after reporting a decline in assets under management for the six-month period ended December. Royal Mail has also plunged after narrowing its profit guidance.

Software giant SAP has declined in Frankfurt after its fourth quarter profit after tax, on an IFRS basis, dropped 9 percent to 1.69 billion euros from last year's 1.86 billion euros.

On a light day on the economic front, survey data from statistical office INSEE showed that French consumer confidence rose more than expected in January after decreasing in December.

The consumer sentiment index rose to 91 from 86 in December amid a sharp improvement in expectations. Economists had forecast a score of 88.

U.S. Economic Reports

Standard & Poor's is scheduled to release its report on home prices in major metropolitan areas in the month of November at 9 am ET.

The annual rate of growth by the S&P CoreLogic Case-Shiller 20-City Composite Home Price Index is expected to slow to 4.9 percent in November from 5.0 percent in October.

At 10 am ET, the Conference Board is due to release its report on consumer confidence in the month of January. Economists expect the consumer confidence index to drop to 124.3 in January from 128.1 in December.

The Treasury Department is scheduled to announce the results of its auction of $32 billion worth of seven-year notes at 1 pm ET.

Stocks In Focus

Shares of Sanmina (SANM) are moving sharply higher in pre-market trading after the electronics manufacturer reported better than expected fiscal first quarter results and provided upbeat guidance.

Specialty glass maker Corning (GLW) is also likely to see initial strength after reporting fourth quarter results that exceeded analyst estimates on both the top and bottom lines.

Shares of Xerox (XRX) may also move to the upside after the office technology provider reported fourth quarter earnings that beat expectations and forecast full-year earnings above estimates.

On the other hand, shares of Harley-Davidson (HOG) are likely to come under pressure after the motorcycle maker reported weaker than expected fourth quarter results.

Appliance maker Whirlpool (WHR) is also moving significantly lower in pre-market trading after reporting fourth quarter earnings that beat estimates but weaker than expected revenues. Whirlpool also provided disappointing full-year 2019 guidance.

Shares of GameStop (GME) are seeing substantial pre-market weakness after the video game retailer said its Board of Directors has concluded its previously announced efforts to pursue a sale of the company.

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