U.S. Stocks Likely To Move Sharply Lower In Early Trading

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Following the drop seen last week, stocks are likely to see further downside in early trading on Monday. The major index futures are currently pointing to a sharply lower open for the markets, with the Dow futures down by 693 points.

The downward momentum on Wall Street comes as traders look ahead to the Federal Reserve's highly anticipated monetary policy announcement on Wednesday.

The Fed is widely expected to leave monetary policy unchanged but could address the outlook for its asset purchase program.

The minutes of the Fed's last meeting signaled the central bank was prepared to begin scaling back asset purchases by the end of the year.

With some recent disappointing economic data suggesting the Fed could push back its plans, traders are likely to pay close attention to the wording of the post-meeting statement.

Shortly after the start of trading, the National Association of Home Builders is scheduled to release its report on homebuilder confidence in the month of September. The housing market index is expected to come in unchanged at 75.

Following the narrowly mixed close seen on Thursday, stocks showed a notable move to the downside during trading on Friday. The major averages all slid firmly into negative territory after ending Thursday's trading on opposite sides of the unchanged line.

The major averages moved roughly sideways in afternoon trading, ending the day firmly in the red. The Dow fell 166.44 points or 0.5 percent to 34,584.88, the Nasdaq slumped 137.96 points or 0.9 percent to 15,043.97 and the S&P 500 slid 40.76 points or 0.9 percent to 4,432.99.

With the drop on the day, the major averages all moved lower for the week. The Dow edged down by 0.1 percent, while the Nasdaq and the S&P 500 dropped 0.5 percent and 0.6 percent, respectively.

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower, although several major markets were closed for holidays. Hong Kong's Hang Seng Index plunged by 3.3 percent, while Australia's S&P/ASX 200 Index tumbled by 2.1 percent.

The major European markets have also shown significant moves to the downside on the day. While the U.K.'s FTSE 100 Index has plummeted by 1.9 percent, the French CAC 40 Index and the German DAX Index are down by 2.7 percent and 2.9 percent, respectively.

In commodities trading, crude oil futures are slumping $1.80 to $70.17 barrel after falling $0.64 to $71.97 a barrel last Friday. Meanwhile, after slipping $5.30 to $1,751.40 an ounce in the previous session, gold futures are rising $5.90 to $1,757.30 an ounce.

On the currency front, the U.S. dollar is trading at 109.53 yen versus the 109.93 yen it fetched at the close of New York trading on Friday. Against the euro, the dollar is trading at $1.1711 compared to last Friday's $1.1725.

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