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U.S. Stocks May Show A Lack Of Direction In Early Trading

wallstreet4 10sep19 lt

After closing mixed for two consecutive sessions, stocks may continue to experience choppy trading on Tuesday. The major index futures are currently pointing to a slightly lower open for the markets, with the Dow futures down by 26 points.

Another quiet day on the U.S. economic front may keep some traders on the sidelines as they continue to digest last Friday's weaker than expected jobs data.

The disappointing job growth raised concerns about the economic outlook but also reinforced expectations of another interest rate cut by the Federal Reserve next week.

Traders may also be reluctant to make significant moves ahead of the European Central Bank meeting on Thursday as well as next week's Fed meeting.

Both central banks are expected to provide additional stimulus in reaction to recent indications of a slowdown by the global economy.

With the major averages back within striking distance of record highs, traders may be questioning whether stocks will see further upside in an economy that requires support from global central banks to avoid recession.

Among individual stocks, shares of Ford (F) are moving notably lower in pre-market trading after Moody's cut the auto giant's debt rating to junk status to reflect the considerable operating, competitive, and market challenges facing the company.

Industrial distributor HD Supply (HDS) may also come under pressure after reporting weaker than expected fiscal second quarter revenues and providing disappointing guidance.

On the other hand, shares of Mallinckrodt (MNK) are likely to see initial strength after the drugmaker agreed to sell its contract development and manufacturing subsidiary BioVectra to an affiliate of H.I.G. Capital for approximately $250 million.

Stocks showed a lack of direction over the course of the trading day on Monday, extending the lackluster performance seen last Friday. The major averages once again spent the day bouncing back and forth across the unchanged line before closing mixed.

While the Dow inched up 38.05 points or 0.1 percent to 26,835.51, its best closing level in over a month, the tech-heavy Nasdaq dipped 15.64 points or 0.2 percent to 8,087.44 and the S&P 500 edged down 0.28 points or less than a tenth of a percent to 2,978.43.

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Tuesday. Japan's Nikkei 225 Index rose by 0.4 percent, while China's Shanghai Composite Index slipped by 0.1 percent.

The major European markets have also turned mixed on the day. While the German DAX Index has crept up by 0.2 percent, the U.K.'s FTSE 100 Index and the French CAC 40 Index are both down by 0.2 percent.

In commodities trading, crude oil futures are climbing $0.61 to $58.46 barrel after jumping $1.33 to $57.85 a barrel on Monday. Meanwhile, after sliding $4.40 to $1,511.10 ounce in the previous session, gold futures are falling $9.40 to $1,501.70 an ounce.

On the currency front, the U.S. dollar is trading at 107.30 yen compared to the 107.24 yen it fetched at the close of New York trading on Monday. Against the euro, the dollar is valued at $1.1038 compared to yesterday's $1.1048.

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