The major U.S. index futures are pointing to a higher opening on Monday, with stocks likely to add to the modest gains posted last Friday. The markets may continue to benefit from positive sentiment generated by the Labor Department's upbeat monthly jobs report.
Overall trading activity may be somewhat subdued, however, with a lack of major U.S. economic data keeping some traders on the sidelines.
Following the release of better than expected employment data, stocks saw modest strength during trading on Friday. While buying interest was somewhat subdued, the Dow still reached another new record closing high.
The major averages ended the day modestly higher. The Dow rose 66.71 points or 0.3 percent to 22,092.81, the Nasdaq edged up 11.22 points or 0.2 percent to 6,351.56 and the S&P 500 crept up 4.67 points or 0.2 percent to 2,476.83.
For the week, the major averages turned in a mixed performance. The Nasdaq fell by 0.4 percent, while the S&P 500 rose by 0.2 percent and the Dow jumped by 1.2 percent.
The modest strength on Wall Street came after a closely watched Labor Department report showed employment in the U.S. jumped by much more than anticipated in the month of July.
The Labor Department said non-farm payroll employment surged up by 209,000 jobs in July after spiking by an upwardly revised 231,000 jobs in June.
Economists had expected employment to climb by 183,000 jobs compared to the addition of 222,000 jobs originally reported for the previous month.
With the stronger than expected job growth, the unemployment rate edged down to 4.3 percent in July from 4.4 percent in June. The modest decrease matched economist estimates.
The report also said average hourly employee earnings were up by 2.5 percent year-over-year in July, unchanged from the previous month.
The data generated optimism about the economic outlook, although it also raised concerns about the possibility of future interest rate hikes.
"Following the disappointing ISM surveys for July, released earlier this week, this employment report provides reassurance that the real economy remained solid at the start of the third quarter," said Michael Pearce, U.S. economist at Capital Economics.
He added, "If the labor market continues to tighten over the coming months, as the survey evidence suggests it will, the Fed will press ahead with rate hikes and balance sheet normalization later this year."
A separate report from the Commerce Department showed the trade deficit narrowed more than expected in June amid rising exports and falling imports.
The report said the trade deficit narrowed to $43.6 billion in June from $46.4 billion in May. Economists had expected the deficit to narrow to $45.0 billion.
After falling sharply over the past few sessions, natural gas stocks showed a strong move back to the upside on the day. The NYSE Arca Natural Gas Index jumped by 1.8 percent after ending Thursday's trading at its lowest closing level in over a month.
Considerable strength was also visible among trucking stocks, as reflected by the 1.9 percent gain posted by the Dow Jones Trucking Index. YRC Worldwide (YRCW) led the sector higher after reporting its second quarter results.
Steel, financial, and telecom stocks also saw some strength on the day, although buying interest was somewhat subdued.
On the other hand, gold stocks came under significant selling pressure on the day, dragging the NYSE Arca Gold Bugs Index down by 1.6 percent. The weakness among gold stocks came amid a notable decrease by the price of the precious metal.
Commodity, Currency Markets
Crude oil futures are falling $0.59 to $48.99 a barrel after climbing $0.55 to $49.58 a barrel last Friday. Meanwhile, an ounce of gold is trading at $1,262.50, down $2.10 from the previous session's close of $1,264.60. On Friday, gold tumbled $9.80.
On the currency front, the U.S. dollar is trading at 110.81 yen compared to the 110.69 yen it fetched at the close of New York trading on Friday. Against the euro, the dollar is valued at $1.1797 compared to last Friday's $1.1773.
Asia
Most Asian stocks rose on Monday after the better than expected U.S. jobs data generated optimism about growth in the world's largest economy.
Investors also awaited Pyongyang's response after the U.N. Security Council unanimously approved tough new sanctions Saturday to punish North Korea for its escalating nuclear and missile programs.
The Japanese yen weakened against the dollar and oil retained most of Friday's gains while gold remained under selling pressure to hover near two-week lows.
China's Shanghai Composite Index reversed early losses to close 17.46 points or 0.5 percent higher at 3,279.54. Hong Kong's Hang Seng Index climbed 127.68 points or 0.5 percent to 27,690.36.
Japanese shares rose as the yen weakened on the upbeat U.S. jobs data and Toyota raised its earnings outlook. The Nikkei 225 Index closed 103.56 points or 0.5 percent higher at 20,055.89, while the broader Topix Index rose 0.5 percent to 1,639.27, the highest level since August of 2015.
Toyota Motor climbed 2 percent after the automaker raised its full-year guidance, citing favorable exchange rates. Suzuki Motor rose 1.1 percent and Mazda Motor advanced 1.4 percent.
Toshiba Corp shares jumped 5.9 percent on reports that its auditor will sign off on its financial results for the year ended March, helping lessen the risk of a delisting.
Australian shares rose sharply to snap a three-session losing streak as higher commodity prices lifted resource stocks and separate surveys on job advertisements and construction activity painted a positive picture of the economy.
The benchmark S&P/ASX 200 Index advanced 53 points or 0.9 percent to 5,773.60, while the broader All Ordinaries Index finished up 51.20 points or 0.9 percent at 5,824.50.
Miners BHP Billiton, Rio Tinto and Fortescue Metals Group rallied 2-3 percent, and energy majors Woodside Petroleum, Origin Energy, Beach Energy, Oil Search and Santos rose 1-4 percent.
Financials also recovered from last week's losses, with the big four banks rising between 0.8 percent and 1.3 percent.
Meanwhile, Casino operator Crown Resorts tumbled 4.3 percent to extend Friday's losses on a brokerage downgrade.
Europe
European stocks have turned mixed on Monday as a slew of weak economic reports offset investor optimism over higher commodity prices.
While the U.K.'s FTSE 100 Index is up by 0.2 percent, the French CAC 40 Index is down by 0.1 percent and the German DAX Index is down by 0.5 percent.
German industrial output unexpectedly fell 1.1 percent month-on-month in June, in contrast to a 1.2 percent rise seen in May, official data showed. Production was forecast to grow 0.1 percent.
Separately, survey results from think tank Sentix showed that investor confidence in the eurozone declined for the second straight month in August to the lowest level in three months. The headline index dropped to 27.7 from 28.3 in July.
U.K. consumer spending and house price inflation figures also disappointed investors.
Dutch postal firm PostNL has plunged after saying that regulatory changes would impact its FY outlook. Paddy Power Betfair shares have also plummeted, as the British gambling firm announced the departure of CEO Breon Corcoran.
Fresenius Medical Care shares have fallen after the German company signed an agreement to acquire NxStage Medical, Inc., a U.S.-based medical technology and services company.
On the positive side, Banco BPM shares have rallied after the Italian lender agreed to sell its asset management business Aletti Gestielle SGR to domestic rival Anima Holding.
Shares of 21st Century Technology have soared after the specialist provider of tailored solutions to the transport community announced a 3-year bus systems and services contract with Abellio.
Renault has also advanced after the French carmaker signed a landmark joint venture deal to build more than 150,000 cars a year in Iran.
U.S. Economic Reports
The economic calendar for this week is relatively quiet, although traders are likely to keep an eye on remarks by several Federal Reserve officials.
Reports on producer and consumer price inflation and labor productivity and costs may also attract some attention.
At 11:45 am ET, St. Louis Fed President James Bullard is due to discuss the U.S. economy and monetary policy at the America's Cotton Marketing Cooperatives 2017 Conference in Nashville, Tennessee.
Minneapolis Fed President Neel Kashkari is scheduled to take part in a moderated audience Q&A session at a Sioux Falls Rotary Club event in Sioux Falls, South Dakota, at 1:25 pm ET.
At 3 pm ET, the Fed is due to release its report on consumer credit in the month of June. Consumer credit is expected to increase by $15.8 billion.
Stocks In Focus
Shares of NxStage Medical (NXTM) are moving sharply higher in pre-market trading after the medical technology and services company agreed to be acquired by Fresenius Medical Care (FMS) for about $2 billion.
Biopharmaceutical company Horizon Pharma (HZNP) may also see early strength after reporting better than expected second quarter results and providing upbeat guidance.
Shares of Tyson Foods (TSN) are also seeing pre-market strength after meat processor reported fiscal third quarter results that exceeded analyst estimates on both the top and bottom lines.
Meanwhile, shares of Zynerba Pharmaceuticals (ZYNE) may come under pressure after the drug developer said its synthetic cannabis-based gel to treat epilepsy failed a mid-stage study.
Berkshire Hathaway (BRK.A) could also see early weakness after reporting second quarter profits that fell 15 percent year-over-year.
Shares of First Data (FDC) are moving lower in pre-market trading even though the payment technology solutions company reported second quarter earnings that met analyst estimates.
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