With traders reacting to disappointing retail sales data, stocks may move back to the downside in early trading on Wednesday after ending the previous sessions sharply higher. The major index futures are currently pointing to a lower open for the markets, with the Dow futures down by 49 points.
The downward momentum for the markets comes following the release of a report from the Commerce Department showing that retail sales fell for the second consecutive month in May.
The report said retail sales edged down by 0.2 percent in May, matching the revised decrease seen in April. Economists had expected sales to dip by 0.2 percent compared to the 0.1 percent increase originally reported for the previous month.
Excluding a 0.8 percent increase in sales by motor vehicle and parts dealers, retail sales fell by 0.4 percent in May compared to a 0.3 percent decrease in April. Economists had expected ex-auto sales to come in roughly flat.
Peter Boockvar, managing director at Miller Tabak, said, "Even with a 4.8% decline in gasoline prices in May, retail sales were mediocre as a still lackluster labor market and sluggish income growth were the main offsets."
A separate report from the Labor Department showed that its producer price index fell by 1.0 percent in May following a 0.2 percent drop in April. The index had been expected to decrease by about 0.6 percent.
Excluding a sharp drop in energy prices as well as a decrease in food prices, the core producer price index crept up by 0.2 percent in May, matching economist estimates.
Traders are also likely to keep an eye on Capitol Hill, where JP Morgan (JPM) chief executive Jamie Dimon is scheduled to testify before the Senate Banking Committee regarding the financial giant's $2 billion trading loss.
Meanwhile, shares of Dell (DELL) may be in focus after the PC giant announced plans to initiate a quarterly dividend of $0.08 per share. The company also said it has executed on its commitment to grow profitability and operating income while expanding its enterprise solutions and services.
After moving sharply lower over the course of the session on Monday, stocks showed a substantial rebound during trading on Tuesday. The markets benefited from bargain hunting as well as a pullback by Spanish bond yields.
The major averages saw continued strength going into the close, ending the day near their highs for the session. The Dow jumped 162.57 points or 1.3 percent to 12,573.80, the Nasdaq advanced 33.34 points or 1.2 percent to 2,843.07 and the S&P 500 surged up 15.25 points or 1.2 percent at 1,324.18.
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher on Wednesday, benefiting from the overnight rally on Wall Street. Japan's Nikkei 225 Index rose by 0.6 percent, while Hong Kong's Hang Seng Index advanced by 0.8 percent.
Meanwhile, the major European markets have moved to the downside on the day. The U.K.'s FTSE 100 Index is down by 0.3 percent, the French CAC 40 Index is down by 0.5 percent, and the German DAX Index is down by 0.7 percent.
In commodities trading, crude oil futures are slipping $0.42 to $82.90 a barrel after climbing $0.62 to $83.32 a barrel on Tuesday. An ounce of gold is fetching $1,623.50, up $9.70 from the previous session's close of $1,613.80. In the previous session, gold added $17.
Among currencies, the U.S. dollar is trading at 79.48 yen compared to the 79.53 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is valued at $1.2538 compared to yesterday's $1.2504.
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