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Weakness Overseas May Weigh On Wall Street

The major U.S. index futures are pointing to a lower opening on Monday, with stocks likely to extend the pullback seen last week. The downward momentum on Wall Street comes amid weakness overseas following the decision by Republican leaders to withdraw their bill to repeal and replace Obamacare.

With traders keeping a close eye on developments on Capitol Hill, stocks saw some volatility over the course of the trading session on Friday. The major averages eventually ended the day on opposite sides of the unchanged line.

While the Nasdaq crept up 11.04 points or 0.2 percent to 5,828.74, the Dow fell 59.86 points or 0.3 percent to 20,596.72 and the S&P 500 edged down 1.98 points or 0.1 percent to 2,343.98.

Despite the mixed performance on the day, the major averages all moved notably lower for the week. The Dow slumped by 1.5 percent, the Nasdaq slid by 1.2 percent and the S&P 500 tumbled by 1.4 percent.

The volatility on Wall Street came as the House prepared to vote on a Republican bill to repeal and replace Obamacare.

Late in the trading day, House Republican leaders decided to withdraw the bill amid indications of a lack of support.

The move came despite vigorous efforts by President Donald Trump and House Speaker Paul Ryan, R-Wis., to build support for the legislation.

A number of more conservative lawmakers opposed the bill amid criticism that it did not go far enough to repeal the provisions of Obamacare.

Moderate Republicans were also concerned about predictions the plan would cause millions of people to lose their insurance.

Even if the Republican healthcare bill had been approved by the House, the legislation was expected to face an even tougher uphill battle in the Senate.

The inability to advance the bill could cast doubt on Trump's ability to deliver on promises of increased infrastructure spending, tax cuts and deregulation.

On the U.S. economic front, the Commerce Department released a report showing a bigger than expected increase in durable goods orders in the month of February.

The report said durable goods orders jumped by 1.7 percent in February after surging up by a revised 2.3 percent in January.

Economists had expected orders to climb by 1.2 percent compared to the 2.0 percent spike that had been reported for the previous month.

Excluding orders for transportation equipment, durable goods orders rose by 0.4 percent in February after edging up by 0.2 percent in January. The increase fell short of estimates for 0.6 percent growth.

Extending the trend seen over the past few sessions, most of the major sectors ended the day showing only modest moves.

Steel stocks saw considerable weakness, however, with the NYSE Arca Steel Index slumping by 1.4 percent. With the drop, the index fell to its lowest closing level in well over two months.

On the other hand, airline stocks moved notably higher, resulting in a 1 percent advance by the NYSE Arca Airline Index. Hawaiian Airlines parent Hawaiian Holdings (HA) posted a standout gain.

Commodity, Currency Markets

Crude oil futures are sliding $0.49 to $47.48 a barrel after rising $0.27 to $47.97 a barrel last Friday. Meanwhile, an ounce of gold is trading at $1,258.30, up $9.80 from the previous session's close of $1,248.50. On Friday, gold inched up $1.30.

On the currency front, the U.S. dollar is trading at 110.17 yen compared to the 111.34 yen it fetched at the close of New York trading on Friday. Against the euro, the dollar is valued at $1.0894 compared to last Friday's $1.0798.

Asia

Asian stocks closed mostly lower on Monday, with a firming yen sending Japanese stocks sharply lower, although losses across the rest of the region remained relatively limited.

The dollar hit its lowest level against the yen since late November after Trump failed to push through a healthcare reform bill seen as crucial to the future of his pro-growth reform agenda that includes increased infrastructure spending, tax cuts and deregulation.

Chinese shares fell despite solid data from the National Bureau of Statistics showing that Chinese industrial profits grew sharply in the first two months of the year.

Industrial profits surged an annual 31.5 percent in the January to February period, accelerating from a 2.3 percent gain in December, data showed.

Nonetheless, the benchmark Shanghai Composite Index slipped 2.49 points or 0.08 percent to 3,266.96, while Hong Kong's Hang Seng Index fell 164.57 points or 0.68 percent to 24,193.70.

Japanese shares fell sharply as Brexit worries and policy uncertainty in the U.S. sent the yen climbing to its highest level against the dollar since late November.

The Nikkei 225 Index tumbled 276.94 points or 1.44 percent to finish at 18,985.59, its lowest level in over a month. The broader Topix Index closed 1.26 percent lower at 1,524.39.

Canon, Sony, Toyota Motor and Honda fell around 1 percent as the dollar threatened to fall below the 110 level against the dollar.

Toshiba fell nearly 2 percent on a Nikkei report that its Westinghouse unit could file for bankruptcy protection on Tuesday and is seeking support from South Korea's Korea Electric Power Corp.

Financials also succumbed to heavy selling pressure, with Mitsubishi UFJ Financial, Sumitomo Mitsui Financial and Dai-ichi Life losing 1-3 percent. Oil explorer Inpex lost 1.5 percent as U.S. crude oil futures fell below $48 a barrel.

On the economic front, the summary of opinions from the Bank of Japan's monetary policy meeting earlier this month showed that members believe the bank should not rush to action and should pursue monetary easing under the current framework with patience.

Australian shares fell, dragged down by miners hit by continued declines in Chinese steel and iron ore futures. The benchmark S&P/ASX 200 Index fell nearly 1 percent in early trade before recouping most of its loss to end the session down 6.80 points or 0.12 percent at 5,76.70. The broader All Ordinaries Index edged down 6.90 points or 0.12 percent to close at 5,789.20.

Miners BHP Billiton, Rio Tinto and Fortescue Metals Group dropped 2-3 percent. BHP spin-off South32 declined 1.8 percent despite announcing a $655 million share buyback.

Meanwhile, gold miners Evolution Mining, Northern Star and Regis Resources rallied 2-5 percent as gold prices hit one-month high. Myer Holdings shares soared more than 18 percent on the buzz that billionaire ragtrader Solomon Lew was buying shares through Pershing Securities.

Europe

European markets are trading lower on Monday, although stocks recouped some early losses following a report on German business sentiment that easily topped forecasts.

While the French CAC 40 Index has fallen by 0.5 percent, the U.K.'s FTSE 100 Index and the German DAX Index are down by 0.8 percent and 0.9 percent, respectively.

The German business confidence index rose to 112.3 in March from 111.1 in February, the latest survey from the Ifo institute showed. Economists had forecast the indicator to fall to 110.8.

Investors also waited to see whether British Prime Minister Theresa May will trigger Article 50 of the EU treaty, which initiates the formal process of leaving the European Union after two years.

Software AG has fallen over 1 percent after announcing the acquisition of Cumulocity GmbH for an undisclosed amount.

British banks Barclays, Standard Chartered and Lloyd Banking have also moved lower after the Bank of England said it would add a new stress test to see how Britain's banks plan to adapt to the U.K.'s withdrawal from the EU.

U.S. Economic Reports

The economic calendar is relatively quiet today but picks up as the week progresses, with traders likely to keep an eye on reports on consumer confidence, pending home sales and personal income and spending.

Speeches by a number of Federal Reserve officials are also likely to attract attention after the central bank's interest rate hike earlier this month.

At 1 pm ET, the Treasury Department is scheduled to announce the results of its auction of $26 billion worth of two-year notes.

Chicago Fed President Charles Evans is due to speak at a Global Interdependence Center event in Madrid, Spain, at 1:15 pm ET.

At 6:30 pm, Dallas Fed President Dennis Kaplan will take part in "A Discussion of Economic Conditions and the Role of Monetary Policy" at Texas A&M University in College Station, Texas.

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