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Stocks May Open Higher On Upbeat Economic Data - U.S. Commentary


After ending the previous session mixed, stocks are likely to move to the upside in early trading on Wednesday. The major index futures are currently pointing to a higher open for the markets, with the Dow futures up by 62 points.

Early buying interest may be generated in reaction to a report from the Commerce Department showing an unexpected increase in durable goods orders in the month of January.

The report said durable goods orders climbed by 0.4 percent in January after spiking by an upwardly revised 1.3 percent in December.

Economists had expected durable goods orders to drop by 0.5 percent compared to the 1.2 percent jump originally reported for the previous month.

However, excluding a continued surge in orders for transportation equipment, durable goods orders edged down by 0.1 percent in January after rising by an upwardly revised 0.3 percent in December.

Ex-transportation orders had been expected to inch up by 0.1 percent, matching the uptick originally reported for the previous month.

A separate report from the Labor Department showed a modest increase in producer prices in the month of February.

The Labor Department said its producer price index for final demand inched up by 0.1 percent in February after edging down by 0.1 percent in January. Economists had expected prices to rise by 0.2 percent.

Excluding food and energy prices, core producer prices also ticked up by 0.1 percent in February after climbing by 0.3 percent in the previous month. Core prices were also expected to increase by 0.2 percent.

Trading activity may be somewhat subdued, however, as traders keep a close eye developments in the U.K. regarding Brexit.

Shortly after the start of trading, the Commerce Department is due to release its report on construction spending in the month of January. Construction spending is expected to rise by 0.4 percent in January after falling by 0.6 percent in December.

Following the rally seen on Monday, the major averages moved in opposite directions during trading on Tuesday. While the Dow pulled back, the broader Nasdaq and S&P 500 extended Monday's strong upward move.

The major averages eventually ended the session mixed. The Dow fell 96.22 points or 0.4 percent to 25,554.66, while the Nasdaq climbed 32.97 points or 0.4 percent to 7,591.03 and the S&P 500 rose 8.22 points or 0.3 percent to 2,791.52.

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Wednesday. Japan's Nikkei 225 Index slumped by 1 percent, while Hong Kong's Hang Seng Index dropped by 0.4 percent.

Meanwhile, the major European markets have moved modestly higher on the day. While the German DAX Index is lingering near the unchanged line, the U.K.'s FTSE 100 Index is up by 0.2 percent and the French CAC 40 Index is up by 0.4 percent.

In commodities trading, crude oil futures are climbing $0.62 to $57.49 a barrel after inching up $0.08 to $56.87 a barrel on Tuesday. Meanwhile, after rising $7 to $1,298.10 an ounce in the previous session, gold futures are advancing $8.60 to $1,306.70 an ounce.

On the currency front, the U.S. dollar is trading at 111.44 yen compared to the 111.36 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is valued at $1.1295 compared to yesterday's $1.1288.

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