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Futures Pointing To Initial Strength On Wall Street - U.S. Commentary


With traders digesting the latest batch of earnings news, 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 43 points.

The markets may initially benefit from a positive reaction to upbeat earnings news from companies like Morgan Stanley (MS) and PepsiCo (PEP).

The financial and snack and beverage giants both reported quarterly results that exceeded analyst estimates on both the top and bottom lines.

Early buying interest may be somewhat subdued, however, as traders also react to disappointing results from companies like Netflix (NFLX) and IBM Corp. (IBM).

Netflix and IBM both reported better than expected earnings but on weaker than expected revenues and provided disappointing guidance.

On the U.S. economic front, a report released by the Commerce Department showed the U.S. trade deficit unexpectedly narrowed in the month of February amid a jump in the value of exports.

The Commerce Department said the trade deficit narrowed to $49.4 billion in February from $51.1 billion in January, while economists had expected the deficit to widen to $53.5 billion.

The Commerce Department is due to release a separate report on wholesale inventories in February shortly after the start of trading. Wholesale inventories are expected to rise by 0.5 percent.

Later in the day, the Fed is due to release its Beige Book, a compilation of anecdotal evidence on economic conditions in the twelve Fed districts.

Stocks fluctuated late in the trading session on Tuesday but managed to finish the day modestly higher. With the uptick on the day, the Dow and the Nasdaq ended the session at their best closing levels in over six months.

The S&P 500 briefly dipped into negative territory in late-day trading but ended the session up 1.48 points or 0.1 percent at 2,907.06. The Dow climbed 67.89 points or 0.3 percent to 26,452.66 and the Nasdaq rose 24.21 points or 0.3 percent to 8,000.23.

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Wednesday. Japan's Nikkei 225 Index rose by 0.3 percent, while Australia's S&P/ASX 200 Index dropped by 0.3 percent.

The major European markets have also turned mixed on the day. While the U.K.'s FTSE 100 Index has edged down by 0.1 percent, the French CAC 40 Index and the German DAX Index are up by 0.3 percent and 0.4 percent, respectively.

In commodities trading, crude oil futures are rising $0.38 to $64.43 a barrel after climbing $0.65 to $64.05 a barrel on Tuesday. Meanwhile, after tumbling $14.10 to $1,277.20 an ounce in the previous session, gold futures are inching up $0.80 to $1278 an ounce.

On the currency front, the U.S. dollar is trading at 111.99 yen compared to the 112 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is valued at $1.1305 compared to yesterday's $1.1281.

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