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

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After moving sharply higher in the previous session, stocks may show a lack of direction in early trading on Tuesday. The major index futures are currently pointing to a mixed open for the markets, with the Dow futures down by 35 points but the Nasdaq futures up by 11 points.

Uncertainty about the near-term outlook for the markets may keep traders on the sidelines after yesterday's rally lifted the Nasdaq and the S&P 500 to their best closing levels in well over two months.

Traders have recently expressed considerable optimism about the economy reopening, although lingering concerns about the coronavirus pandemic may lead to some caution.

Reaction to Federal Reserve Chair Jerome Powell and Treasury Secretary Steven Mnuchin's testimony before the Senate Banking Committee may also drive early trading on Wall Street.

Powell's prepared remarks largely focus on the actions the Fed has already taken, which may lead traders to pay closer attention to the question-and-answer portion of his testimony.

Traders are also digesting the latest earnings news, with shares of Walmart (WMT) moving notably higher in pre-market trading after the retail giant reported better than expected first quarter results.

On the U.S. economic front, the Commerce Department released a report showing another steep drop in new residential construction in the U.S. in the month of April.

The report said housing starts plummeted by 30.2 percent to an annual rate of 891,000 in April after tumbling by 18.6 percent to a revised 1.276 million in March.

Economists had expected housing stocks to plunge by 23.8 percent to a rate of 927,000 from the 1.216 million originally reported for the previous month.

The Commerce Department said building permits also slumped by 20.8 percent to an annual rate of 1.074 million in April after falling by 5.7 percent to a revised 1.356 million in March.

Building permits, an indicator of future housing demand, had been expected to nosedive by 26.1 percent to a rate of 1 million from the 1.353 million originally reported for the previous month.

Following the sharp pullback seen last week, stocks moved significantly higher over the course of the trading session on Monday. The major averages all showed strong moves to the upside on the day.

The major averages pulled back off their highs going into the close but remained firmly positive. The Dow soared 911.95 points or 3.9 percent to 24,597.37, the Nasdaq surged up 220.27 points or 2.4 percent to 9,234.83 and the S&P 500 jumped 90.21 points or 3.2 percent to 2,953.91.

In overseas trading, stock markets across the Asia-Pacific region moved sharply higher during trading on Tuesday. Japan's Nikkei 225 Index jumped by 1.5 percent, while Hong Kong's Hang Seng Index spiked by 1.9 percent.

Meanwhile, the major European markets have moved to the downside on the day. While the German DAX Index has edged down by 0.1 percent, the U.K.'s FTSE 100 Index and the French CAC 40 Index are down by 0.5 percent and 0.6 percent, respectively.

In commodities trading, crude oil futures are climbing $0.71 to $32.53 a barrel after spiking $2.39 to $31.82 a barrel on Monday. Meanwhile, after tumbling $21.90 to $1,734.40 an ounce in the previous session, gold futures are inching up $1 to $1,735.40 an ounce.

On the currency front, the U.S. dollar is trading at 107.90 yen compared to the 107.34 yen it fetched at the close of New York trading on Monday. Against the euro, the dollar is valued at $1.0949 compared to yesterday's $1.0913.

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