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Steep Drop By Boeing Likely To Weigh On The Dow - U.S. Commentary


Following the pullback seen last week, the major averages may turn mixed in early trading on Monday. The major index futures are currently pointing to a mixed open, with the Dow futures down by 193 points but the Nasdaq futures up by 30.50 points.

A steep drop by shares of Boeing (BA) is likely to weigh on the Dow, as the aerospace giant is plunging by more than 10 percent in pre-market trading.

Boeing is under pressure following the crash of Ethiopian Airlines Flight 302, which is the second crash in five months involving the company's 737 Max 8 model.

Meanwhile, the broader Nasdaq and S&P 500 may move to the upside following the release of a report from the Commerce Department showing an unexpected uptick in U.S. retail sales in January.

The Commerce Department said retail sales rose by 0.2 percent in January after tumbling by a revised 1.6 percent in December.

Economists had expected retail sales to come in unchanged compared to the 1.2 percent slump originally reported for the previous month.

Excluding a steep drop in auto sales, retail sales climbed by 0.9 percent in January after plummeting by a revised 2.1 percent in December.

Ex-auto sales had been expected to increase by 0.3 percent compared to the 1.8 percent plunge originally reported for the previous month.

Shortly after the start of trading, the Commerce Department is scheduled to release a separate report on business inventories in the month of December. Inventories are expected to climb by 0.6 percent.

After an initial move to the downside, stocks staged a few recovery attempts over the course of the trading session on Friday. The major averages rallied going into the close of trading but still ended the day modestly lower.

The Dow edged down 22.99 points or 0.1 percent to 25,450.24, the Nasdaq dipped 13.32 points or 0.2 percent to 7,408.14 and the S&P 500 slipped 5.86 points or 0.2 percent to 2,743.07. With the drop, the major averages extended the pullback seen over the past few sessions.

For the week, the Dow and the S&P 500 both slumped by 2.2 percent, while the tech-heavy Nasdaq tumbled by 2.5 percent.

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Monday. Japan's Nikkei 225 Index climbed by 0.5 percent, while Hong Kong's Hang Seng Index jumped by 1 percent.

The major European markets have also moved to the upside on the day. While the French CAC 40 Index has edged up by 0.2 percent, the German DAX Index is up by 0.3 percent and the U.K.'s FTSE 100 Index is up by 0.4 percent.

In commodities trading, crude oil futures are rising $0.36 to $56.43 a barrel after sliding $0.59 to $56.07 a barrel last Friday. Meanwhile, an ounce of gold is trading at $1,295.50, down $3.80 from the previous session's close of $1,299.30. On Friday, gold jumped $13.20.

On the currency front, the U.S. dollar is trading at 111.12 yen compared to the 111.17 yen it fetched at the close of New York trading on Friday. Against the euro, the dollar is valued at $1.1240 compared to last Friday's $1.1235.

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