After showing a strong upward move last week, stocks may give back some ground in early trading on Monday. The major index futures are currently pointing to a modestly lower open for the markets, with the Dow futures down by 23 points.
Profit taking is likely to contribute to any early weakness on Wall Street, with some traders looking to cash in on the recent strength in the markets.
Last week's gains extended a recent upward trend by the markets, with the Dow and the S&P 500 reaching new record closing highs last Friday. The Nasdaq also set a new twelve-year high.
Traders have recently shown a reluctant to sell stocks, however, leading to relatively brief pullbacks by the markets.
A lack of major U.S. economic data may also keep some traders on the sidelines, looking ahead to the release of key reports on new and existing home sales, weekly jobless claims, and durable goods orders.
Comments from Federal Reserve Chairman Ben Bernanke are also likely to be in focus later in the week, with the Fed chief due to testify before the Joint Economic Committee of Congress on Wednesday.
Among individual stocks, shares of Yahoo (YHOO) may attract attention after the online media giant announced an agreement to acquire popular blogging service Tumblr for $1.1 billion, mostly in cash. Yahoo said Tumblr will be independently operated as a separate business.
Internet security company Websense (WBSN) is moving sharply higher in pre-market trading after agreeing to be acquired by private equity firm Vista Equity Partners for approximately $1 billion. The deal values Websense at $24.75 per share, a 29 percent premium to its closing price on Friday.
Meanwhile, shares of QLogic (QLGC) may come under pressure after the network infrastructure provider said Simon Biddiscombe has resigned his positions as president and chief executive officer in order to pursue other opportunities.
Stocks moved sharply higher over the course of the trading day on Friday, more than offsetting the weakness seen on Thursday. In a reversal from the previous session, the markets benefited from some upbeat U.S. economic data as well as comments from a Federal Reserve official.
The major averages saw further upside going into the close, with the Dow and the S&P 500 reaching new record highs. The Dow climbed 121.80 points or 0.8 percent to 15,354.40, the Nasdaq advanced 33.72 points or 1 percent to 3,498.97 and the S&P 500 rose 15.65 points or 1 percent to 1,666.12.
With the gains on the day, the major averages all posted strong gains for the week. The Dow surged up by 1.6 percent, while the Nasdaq the S&P 500 jumped 1.8 percent and 2 percent, respectively.
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Monday. Japan's Nikkei 225 Index advanced by 1.5 percent, while Hong Kong's Hang Seng Index surged up by 1.8 percent.
Meanwhile, the major European markets have turned mixed on the day. While the German DAX Index has edged up by 0.1 percent, the U.K.'s FTSE 100 Index and the French CAC 40 Index have both dipped by 0.1 percent.
In commodities trading, crude oil futures are slipping $0.35 to $95.67 a barrel after edging down $0.02 or less than a tenth of a percent to $96.02 a barrel in the week ended May 17th. Gold futures, which fell $71.90 or 5 percent to $1,364.70 an ounce last week, are sliding $5.80 to $1,358.90 an ounce.
On the currency front, the U.S. dollar strengthened against most currencies last week, climbing 1.5 percent against the yen to 103.21 and rising 1.11 percent against the euro before ending the week at $1.2839. The greenback is currently trading at 102.40 yen and is valued at $1.2857 versus the euro.
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