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Stocks May Open Higher On News Of Deal To Avoid Shutdown - U.S. Commentary


Following the lackluster performance in the previous session, stocks are likely to move to the upside in early trading on Tuesday. The major index futures are currently pointing to a higher open for the markets, with the Dow futures up by 194 points.

Optimism lawmakers will manage to avoid another government shutdown may generate early buying interest after negotiators reached a tentative agreement on border security.

Senate Appropriations Committee Chairman Richard Shelby, R-Ala., a lead Republican negotiator, said the two sides have reached an "agreement in principle."

The agreement reportedly includes $1.4 billion for physical barriers on the border, well short of the $5.7 billion President Donald Trump has demanded for construction or a border wall.

Democrats have also purportedly agreed to drop their demand to reduce the number of illegal immigrants who can be detained by Immigration and Customs Enforcement.

Shelby said the White House has been consulted throughout the negotiations, although it remains to be seen if Trump will sign off on the deal.

Trump continued to tout the success of walls during a rally in the border town of El Paso, Texas, on Monday, claiming sections of the wall are already being built or refurbished despite the dispute with Democrats.

The news comes as lawmakers face a deadline of midnight on Friday to pass a spending bill and avoid another government shutdown.

Shortly after the start of trading, the Labor Department is scheduled to release the results of its Job Openings and Labor Turnover Survey for December. Job openings are expected to inch up to 6.900 million in December after slipping to 6.888 million in November.

Stocks showed a lack of direction over the course of the trading session on Monday after failing to sustain an initial move to the upside. The major averages spent the day bouncing back and forth across the unchanged line.

Eventually, the major averages closed mixed for the second consecutive session. While the Dow dipped 53.22 points or 0.2 percent to 25,053.11, the Nasdaq edged up 9.71 points or 0.1 percent to 7,307.90 and the S&P 500 inched up 1.92 points or 0.1 percent to 2,709.80.

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Tuesday. Japan's Nikkei 225 Index soared by 2.6 percent, while China's Shanghai Composite Index climbed by 0.7 percent.

European stocks have also moved mostly higher, although the U.K.'s FTSE 100 Index has bucked the uptrend and edged down by 0.1 percent. The German DAX Index is jumping by 1.1 percent and the French CAC 40 Index is advancing by 0.9 percent.

In commodities trading, crude oil futures are surging up $1.16 to $53.57 barrel after falling $0.31 to $52.41 a barrel on Monday. Meanwhile, after sliding $6.60 to $1,311.90 ounce in the previous session, gold futures are rising $4.30 to $1,316.20 an ounce.

On the currency front, the U.S. dollar is trading at 110.41 yen compared to the 110.38 yen it fetched at the close of New York trading on Monday. Against the euro, the dollar is valued at $1.1295 compared to yesterday's $1.1276.

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