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Upbeat Best Buy Earnings, Guidance May Contribute To Initial Strength On Wall Street

The major U.S. index futures are currently pointing to a higher open on Tuesday, with stocks likely to regain ground after ending the previous session mostly lower.

Early buying interest may be generated amid a positive reaction to earnings news from consumer electronics retailer Best Buy (BBY).

Shares of Best Buy are surging by 8.4 percent in pre-market trading after the company reported better than expected third quarter results and raised its full-year guidance.

Apparel retailer Abercrombie & Fitch (ANF) is also likely to see initial strength after reporting an unexpected third quarter profit on sales that beat analyst estimates.

Abercrombie & Fitch CEO Fran Horowitz also said the company is "cautiously optimistic" about the holiday shopping season.

On the other hand, shares of Zoom (ZM) may come under pressure after the video conferencing platform reported better than expected third quarter results but provided disappointing guidance.

Overall trading activity may remain somewhat subdued, with a lack of major U.S. economic data likely to keep some traders on the sidelines.

Reports on durable goods orders and new home sales may attract attention on Wednesday along with the minutes of the latest Federal Reserve meeting, although many traders will already have headed out for the Thanksgiving Day holiday.

After ending last Friday's choppy session mostly higher, stocks moved back to the downside during trading on Monday. The tech-heavy Nasdaq showed a particularly steep drop after ending the preceding session little changed.

The major averages all finished the day in negative territory, although the Dow posted a relatively modest loss, edging down 45.41 points or 0.1 percent to 33,700.28. The Nasdaq tumbled 121.55 points or 1.1 percent at 11,024.51 and the S&P 500 slid 15.40 points or 0.4 percent to3,949.94.

Concerns about the outlook for the global economy contributed to the weakness on Wall Street amid a surge in new Covid cases in China.

China reported the death of three people after contracting Covid, marking the first Covid-related deaths that China's mainland has reported since May.

The surge in new cases had led China to impose stringent restrictions in cities like Beijing and Shanghai, shattering recent hopes the country would soon ease Covid curbs.

"Stocks are lower as the global growth picture takes a hit following key China Covid lockdowns and as the US economy could have to deal with a massive rail worker strike before the holidays," said Edward Moya, senior market analyst at OANDA.

He added, "Adding to the risk aversion tone are rising concerns that future Russian attacks on Ukraine's nuclear power supply could be catastrophic.

Trading activity was relatively subdued, however, with some traders likely looking to get a head start on the upcoming Thanksgiving Day holiday.

Energy stocks regained ground after an early sell-off but still ended the considerably lower, with the Philadelphia Oil Service Index tumbling by 2.3 percent and the NYSE Arca Oil Index falling by 1.5 percent.

The weakness among energy stocks came as the price of crude oil recovered after plunging to a ten-month low but still closed modestly lower.

Computer hardware and semiconductor stocks also saw significant weakness on the day, contributing to the steep drop by the Nasdaq.

Housing and biotechnology stocks also moved to the downside, while some strength was visible among steel and utilities stocks.

Commodity, Currency Markets

Crude oil futures are jumping $1.34 to $81.38 a barrel after edging down $0.07 to $80.04 a barrel on Monday. Meanwhile, after falling $14.80 to $1,739.60 an ounce in the previous session, gold futures are rising $6.10 to $1,745.70 an ounce.

On the currency front, the U.S. dollar is trading at 141.41 yen compared to the 142.14 yen it fetched at the close of New York trading on Monday. Against the euro, the dollar is valued at $1.0269 compared to yesterday's $1.0242.

Asia

Asian stocks turned in a mixed performance on Tuesday as fresh COVID-19 outbreaks and strict pandemic measures stoked concerns that Beijing might slow the reopening of its economy.

China's Shanghai Composite Index finished 0.1 percent higher at 3,088.94 despite increasing restrictions on millions of people in multiple cities to fight virus outbreaks. Hong Kong's Hang Seng Index tumbled 1.3 percent to 17,424.41.

Japanese shares rose notably as the yen continued to weaken after comments from several Federal Reserve officials. The Nikkei 225 Index climbed 0.6 percent to 28,115.74, while the broader Topix ended 1.1 percent higher at 1,994.75.

Exporters Honda Motor, Canon, Sony and Panasonic surged 1-3 percent. Drug maker Shionogi & Co advanced 2.8 percent after reports of its COVID-19 drug gaining efficacy approval.

Seoul stocks ended lower as investors grappled with a raft of global uncertainties. The Kospi dropped 0.6 percent to 2,405.27 ahead of the Federal Reserve's latest policy meeting minutes due this week. Samsung Electronics, SK Hynix and Hyundai Motor all fell over 1 percent.

Australian markets rose, led by gains in the mining and energy sectors. The benchmark S&P/ASX 200 Index gained 0.6 percent to settle at 7,181.30, while the broader All Ordinaries Index closed 0.6 percent higher at 7,376.40.

Mining heavyweight BHP rose 1.2 percent after it reached an agreement with workers to avert a strike at its Escondida copper mine in Chile. Santos and Woodside Energy jumped 2-3 percent, tracking higher oil prices after Saudi Arabia denied reports of planned increases in OPEC+ supply.

Europe

European stocks have moved mostly higher on Tuesday, with U.K. stocks outperforming as oil and mining stocks rebound after suffering heavy losses in the previous session.

A cautious undertone has prevailed due to uncertainty over Fed policy and fears over China's worsening COVID situation. Investors are also reacting to mixed comments from ECB policymakers on the rate hike path.

After several ECB officials hinted at slower rate hikes, ECB policymaker Robert Holzmann has backed another 75 basis point rate hike at the next rate-setting meeting in December.

While the U.K.'s FTSE 100 Index has advanced by 0.7 percent, the German DAX Index is up by 0.2 percent and the French CAC 40 Index is up by 0.1 percent.

BP Plc and Shell have jumped, tracking higher oil prices after Saudi Arabia's energy minister denied a report that suggested OPEC+ group was considering an increase in supply.

Babcock International, an aerospace, defense and nuclear engineering services company, has also surged after reaffirming its full-year outlook.

Italian utility Enel has also moved to the upside after it unveiled plans to cut debt with asset sales worth 21 billion euros ($21.51 billion).

Meanwhile, Dutch tech investor Prosus has tumbled after flagging an expected earnings slump for the six months to September 20.

Societe Generale shares have also fallen in Paris. The financial services company has joined with AllianceBernstein (AB), an investment management and research firm, to form a joint venture to accelerate growth in cash equities.

Thyssenkrupp shares have also slumped after activist fund Cevian cut its stake in the German industrial engineering company to less than 1 percent.

In economic news, the U.K. budget deficit widened in October as the government started paying under the energy support scheme, official data showed.

Public sector net borrowing, excluding banks, increased by 4.4 billion pounds from the last year to 13.5 billion pounds in October, the Office for National Statistics reported.

This was the fourth highest October borrowing since monthly records began in 1993 but below economists' forecast of 22 billion pounds.

U.S. Economic Reports

Cleveland Federal Reserve Bank President Loretta Mester is due to give welcome remarks before a virtual event, Cleveland Fed Conversations on Central Banking: Wages and Inflation, at 11 am ET.

At 1 pm ET, the Treasury is scheduled to announce the results of this month's auction of $35 billion worth of seven-year notes.

Stocks In Focus

Shares of Agilent Technologies (A) are seeing significant pre-market strength after the laboratory instruments maker reported fiscal fourth quarter results that beat analyst estimates on both the top and bottom lines.

Apparel retailer Urban Outfitters (URBN) may also move to the upside after reporting better than expected third quarter revenues and saying it is "encouraged" by sales in the current quarter.

On the other hand, shares of Medtronic (MDT) may come under pressure after the medical equipment maker reported mixed third quarter results and provided disappointing guidance.

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