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

wallstreet1 061318 21oct20 lt

After ending the previous session modestly higher, stocks may show a lack of direction in early trading on Wednesday. The major index futures are currently pointing to a roughly flat open for the markets, with the Dow futures up by just 14 points.

Traders may be reluctant to make any significant moves amid continued uncertainty about a new stimulus bill.

White House chief of staff Mark Meadows told CNBC on Tuesday that House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin have made "good progress" in talks but noted they "still have a ways to go" before an agreement is reached.

Pelosi and Mnuchin are expected to talk again today as they seek to reach an agreement on a new relief package before next month's elections.

However, Senate Majority Leader Mitch McConnell revealed on Tuesday that he has warned the White House not to make a deal with Pelosi before the elections.

Among individual stocks, shares of Snap Inc. (SNAP) are skyrocketing in pre-market trading after the Snapchat parent reported a surprise third quarter profit on better than expected revenues.

Auto retailer AutoNation (AN) is also likely to see initial strength after reporting third quarter results that exceeded analyst estimates and increased its share repurchase authorization.

On the other hand, shares of Netflix (NFLX) may come under pressure after the video streaming giant reported weaker than expected third quarter earnings.

Later this afternoon, the Federal Reserve is due to release its Beige Book, a compilation of anecdotal evidence on economic conditions in the twelve Fed districts,

Despite staying somewhat sluggish at times during the day's session, U.S. stocks closed modestly higher on Tuesday as investors continued to hope lawmakers will eventually agree on a stimulus plan sometime soon.

Stronger than expected earnings reports from Procter & Gamble (PG) and Travelers (TRV) also contributed to the firm trend in the market.

Reports that Moderna's (MRNA) coronavirus vaccine could be available for emergency use in December if it gets positive results from interim trial in November further aided sentiment.

As stocks held in positive territory throughout the session, the major averages all ended on a firm note. The Dow, which was up more than 300 points at one stage, ended with a gain of 113.37 points or 0.4 percent at 28,308.79, the Nasdaq climbed 37.61 points or 0.3 percent to close at 11,516.49 and the S&P 500 advanced 16.20 points or 0.5 percent to 3,443.12.

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 China's Shanghai Composite Index edged down by 0.1 percent.

Meanwhile, the major European markets have all moved to the downside on the day. While the U.K.'s FTSE 100 Index has tumbled by 1.4 percent, the French CAC 40 Index is down by 1 percent and the German DAX Index is down by 0.8 percent.

In commodities trading, crude oil futures are falling $0.57 to $41.13 a barrel after climbing $0.64 to $41.70 a barrel on Tuesday. Meanwhile, an ounce of gold is trading at $1,927, up $11.60 compared to the previous session's close of $1,915.40. On Tuesday, gold rose $3.70.

On the currency front, the U.S. dollar is trading at 104.69 yen compared to the 105.50 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is trading at $1.1860 compared to yesterday's $1.1822.

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