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U.S. Stocks May Give Back Ground In Early Trading

wallstreet4 061518 24jan23 lt

After moving sharply higher over the two previous sessions, stocks may give back ground 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 101 points.

Traders may look to cash in on the recent strength in the markets amid lingering concerns about the outlook for interest rates and the economy.

The notable two-day rally seen last Friday and Monday lifted the Nasdaq and the S&P 500 to their best closing levels in over a month.

A steep drop by shares of 3M (MMM) may weigh on the Dow, with the diversified manufacturer plunging by 4.5 percent in premarket trading.

3M is under pressure after reporting weaker than expected fourth quarter earnings and providing disappointing guidance. The company also announced plans to cut 2,500 jobs.

Fellow Dow component Verizon (VZ) may also move to the downside after reporting mixed fourth quarter results and forecasting 2023 earnings below analyst estimates.

Shares of Johnson & Johnson (JNJ) are also seeing pre-market weakness even though the healthcare giant reported better than expected fourth quarter earnings and provided upbeat guidance.

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

Reports on durable goods orders, fourth quarter GDP, new home sales and personal income and spending are likely to attract attention in the coming days.

Stocks moved sharply higher over the course of the trading session on Monday, extending the significant rebound seen last Friday. With the continued upward move, the Nasdaq and the S&P 500 reached their best closing levels in over a month.

The major averages pulled back off their highs of the session late in the day but remained firmly positive. While the Nasdaq soared 223.98 points or 2.0 percent to 11,364.41, the S&P 500 jumped 47.20 points or 1.2 percent to 4,019.81 and the Dow climbed 254.07 points or 0.8 percent to 33,62.56.

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher on Tuesday, although most markets remained closed for the Lunar New Year. Japan's Nikkei 225 Index shot up by 1.5 percent, while Australia's S&P/ASX 200 Index rose by 0.4 percent.

Meanwhile, the major European markets are seeing modest weakness on the day. While the French CAC 40 Index is just below the unchanged line, the German DAX Index and the U.K.'s FTSE 100 Index are both down by 0.3 percent.

In commodities trading, crude oil futures are creeping up $0.14 to $81.76 a barrel after edging down $0.02 to $81.62 a barrel on Monday. Meanwhile, after inching up $0.40 to $1,928.60 an ounce in the previous session, gold futures are rising $8.40 to $1,937 an ounce.

On the currency front, the U.S. dollar is trading at 130.26 yen compared to the 130.67 yen it fetched at the close of New York trading on Monday. Against the euro, the dollar is valued at $1.0873 compared to yesterday's $1.0872.

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