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U.S. Stocks May See Initial Weakness On Apple Warning

wallstreet july20 18feb20 lt

With traders returning to their desks following the long holiday weekend, stocks are likely to move to the downside in early trading on Tuesday. The major index futures are currently pointing to a lower open for the markets, with the Dow futures down by 135 points.

The downward momentum on Wall Street comes after tech giant Apple (AAPL) warned of weaker than previously forecast second quarter revenue.

Apple said it expects to miss its forecast for second quarter revenue of $63 billion to $67 billion due to lower iPhone production and weak Chinese demand as a result of the coronavirus outbreak.

Disappointing earnings news from Walmart (WMT) may also weigh on the markets after the retail giant reported weaker than expected fourth quarter results and provided disappointing guidance.

Meanwhile, the Federal Reserve Bank of New York released a report showing growth in New York manufacturing activity saw a notable acceleration in the month of February.

The New York Fed said its general business conditions index climbed to 12.9 in February from 4.8 in January, with a positive reading indicating growth in regional manufacturing activity. Economists had expected the index to inch up to 5.0.

The bigger than expected increase by the headline index came as the new orders index shot up 16 points to 22.1 and the shipments index climbed to 18.9.

Shortly after the start of trading, the National Association of Home Builders is scheduled to release its report on homebuilder confidence in the month of February. Economists expect the housing market to come in unchanged in February after slipping to 75 in January.

Following the volatility seen over the course of Thursday's session, stocks continue to experience choppy trading on Friday. The major averages spent the day bouncing back and forth across the unchanged line before eventually closing mixed.

While the Dow edged down 25.23 points or 0.1 percent to 29,398.08, the Nasdaq inched up 19.21 points or 0.2 percent to 9,731.18 and the S&P 500 crept up 6.22 points or 0.2 percent to 3,380.16.

Despite the mixed performance on the day, the major averages all moved higher for the week. While the Nasdaq soared by 2.2 percent, the S&P 500 surged up by 1.6 percent and the Dow jumped by 1 percent.

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Tuesday. Japan's Nikkei 225 Index slumped by 1.4 percent, while Hong Kong's Hang Seng Index tumbled by 1.5 percent.

The major European markets have also moved to the downside on the day. While the French CAC 40 Index has fallen by 0.4 percent, the German DAX Index and the U.K.'s FTSE 100 Index are down by 0.7 percent and 0.8 percent, respectively.

In commodities trading, crude oil futures are sliding $1.07 to $50.98 a barrel after climbing $0.63 to $52.05 a barrel last Friday. Meanwhile, an ounce of gold is trading at $1,594, up $7.60 from the previous session's close of $1,586.40. On Friday, gold rose $7.60.

On the currency front, the U.S. dollar is trading at 109.78 yen compared to the 109.88 yen it fetched at the close of New York trading on Friday. Against the euro, the dollar is valued at $1.0801 compared to last Friday's $1.0836.

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