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U.S. Stocks May Give Back Ground Following Recent Strength

wallstreet1 061318 22jan21 lt

Stocks are likely to come under pressure in early trading on Friday, giving back ground following recent strength. The major index futures are currently pointing to a lower open for the markets, with the Dow futures down by 242 points.

Profit taking may contribute to initial weakness on Wall Street, as some traders look to cash in on the recent run to new record highs.

Uncertainty about President Joe Biden's proposed $1.9 trillion coronavirus relief package may also generate selling pressure after Republican Senators Mitt Romney and Lisa Murkowski both expressed skepticism about more stimulus.

Romney and Murkowski both pointed to the recently approved $900 billion stimulus and raised questions about whether more relief is needed.

Democrats could attempt to pass a new stimulus bill without Republican support by the so-called reconciliation process, which only requires a majority.

However, Democratic Senator Joe Manchin has also expressed concerns about the cost of increasing the size of direct payments to individuals to $2,000 from $600.

A steep drop by shares of IBM Corp. (IBM) may also weigh on Wall Street after the tech giant reported better than expected fourth quarter earnings but on revenues that missed analyst estimates.

Semiconductor giant Intel (INTC) is also seeing notable pre-market weakness after jumping late in the previous session after reporting better than expected fourth quarter results just before the close of trading.

Intel released its quarterly results ahead of schedule following reports that a graphic in its earnings statement had been the object of unauthorized access.

Shortly after the start of trading, the National Association of Realtors is scheduled to release its report on existing home sales in the month of December. Existing home sales are expected to slump by 1.4 percent in December.

Stocks turned in a relatively lackluster performance during trading on Thursday, although the tech-heavy Nasdaq still climbed to a near record closing high. The Dow and the S&P 500 bounced back and forth across the unchanged line before closing nearly flat.

While the Nasdaq climbed 73.67 points or 0.6 percent to 13,530.92, the S&P 500 inched up 1.22 points or less than a tenth of a percent to 3,853.07 and the Dow edged down 12.37 points or less than a tenth of a percent to 31,176.01.

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Friday. Japan's Nikkei 225 Index fell by 0.3 percent ,while Hong Kong's Hang Seng Index tumbled by 1.6 percent.

The major European markets have also moved to the downside on the day. While the French CAC 40 Index has slumped by 1.1 percent, the U.K.'s FTSE 100 Index is down by 0.8 percent and the German DAX Index is down b 0.7 percent.

In commodities trading, crude oil futures are plunging $1.63 to $51.50 a barrel after slipping $0.18 to $53.13 a barrel on Thursday. Meanwhile, after edging down $0.60 to $1,865.90 an ounce in the previous session, gold futures are plummeting $28.40 to $1,837.50 an ounce.

On the currency front, the U.S. dollar is trading at 103.84 yen versus the 103.50 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.2162 compared to yesterday's $1.2164.

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