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U.S. Stocks May Open Higher On Upbeat Earnings News

wallstreet oct25 16jul19 lt

After inching up to new record highs in the previous session, stocks may show another modest 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 28 points.

Early buying interest may be generated in reaction to upbeat earnings news from big-name companies such as Goldman Sachs (GS) and Johnson & Johnson (JNJ).

Goldman Sachs and Johnson & Johnson both reported second quarter results that exceeded analyst estimates on both the top and bottom lines, with J&J also boosting its full-year sales guidance.

On the other hand, shares of JPMorgan (JPM) are seeing pre-market weakness after the financial giant reported better than expected second quarter earnings but cut its forecast for 2019 net interest income.

A report from the Commerce Department showing much stronger than expected U.S. retail sales growth may also keep buying interest subdued amid concerns the data could reduce the chances of a near-term interest rate cut.

The Commerce Department said retail sales rose by 0.4 percent in June, matching the downwardly revised increase in May.

Economists had expected retail sales to inch up by 0.1 percent compared to the 0.5 percent growth originally reported for the previous month.

Excluding a continued increase in auto sales, retail sales still rose by 0.4 percent in June after climbing by a downwardly revised 0.4 percent in May.

Ex-auto sales had also been expected to tick up by 0.1 percent compared to the 0.5 percent increase originally reported for the previous month.

A separate report from the Labor Department showed U.S. import prices fell by more than expected in the month of June.

The Labor Department said import prices tumbled by 0.9 percent in June, while revised data showed prices were unchanged in May.

Import prices had been expected to drop by 0.7 percent compared to the 0.3 percent decrease originally reported for the previous month.

The report also showed a continued decrease in export prices, which slumped by 0.7 percent in June after dipping by 0.2 percent in May. Economists had expected another 0.2 percent drop.

Just before the start of trading, the Federal Reserve is scheduled to release its report on industrial production in the month of June. Industrial production is expected to edge up by 0.2 percent in June after rising by 0.4 percent in May.

The National Association of Home Builders is also due to release its report on homebuilder confidence in the month of July. Economists expect the housing market index to come in unchanged in July after dipping to 64 in June.

Additionally, the Commerce Department is slated to release its report on business inventories in the month of May. Business inventories are expected to rise by 0.4 percent in May after climbing by 0.5 percent in April.

After reaching new record intraday highs early in the session, stocks showed a lack of direction over the course of the trading day on Monday. Despite the choppy trading on the day, the major averages ended the session at new record closing highs.

The major averages finished the day modestly higher. The Dow inched up 27.13 points or 0.1 percent to 27,359.16, the Nasdaq rose 14.04 points or 0.2 percent to 8,258.19 and the S&P 500 crept up 0.53 points or less than a tenth of a percent to 3,014.30.

In overseas trading, stock markets across the Asia-Pacific region turned in another mixed performance during trading on Tuesday. Japan's Nikkei 225 Index slid by 0.7 percent, while Hong Kong's Hang Seng Index edged up by 0.2 percent.

Meanwhile, the major European markets have all moved to the upside on the day. While the French CAC 40 Index has risen by 0.5 percent, the U.K.'s FTSE 100 Index is up by 0.4 percent and the German DAX Index is up by 0.3 percent.

In commodities trading, crude oil futures are inching up $0.14 to $59.72 barrel after falling $0.63 to $59.58 a barrel on Monday. Meanwhile, after rising $1.30 to $1,413.50 ounce in the previous session, gold futures are slipping $2.20 to $1,411.30 an ounce.

On the currency front, the U.S. dollar is trading at 108.23 yen compared to the 107.91 yen it fetched at the close of New York trading on Monday. Against the euro, the dollar is valued at $1.1213 compared to yesterday's $1.1258.

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