U.S. Stocks May Give Back Ground In Early Trading

wallstreet july20 18oct21 lt

After moving higher over the past few sessions, stocks may give back ground in early trading on Monday. The major index futures are currently pointing to a lower open for the markets, with the Dow futures down by 143 points.

Profit taking may contribute to initial weakness on Wall Street, with traders cashing in on recent strength in the markets.

The Dow and the S&P 500 reached new one-month closing highs last Friday, although there continues to be some concern about the near-term outlook for the markets.

Worries about the global economic outlook may also weigh on the markets after data showed the Chinese economy hit its slowest pace of growth in a year in the third quarter, hurt by power shortages, supply bottlenecks, sporadic Covid-19 outbreaks and major wobbles in the property sector.

China's GDP expanded 4.9 percent year-on-year in the third quarter of 2021, the National Bureau of Statistics said, missing forecasts for 5.2 percent and down sharply from 7.9 percent in the three months prior.

The downward momentum on Wall Street also comes amid a continued increase by Treasury yields, with the yield on the benchmark ten-year note climbing to its highest level in over four months.

Treasury yields are moving higher as the Federal Reserve plans to begin scaling back its bond purchases as early as next month.

Stocks moved mostly higher during trading on Friday, extending the rally seen over the course of Thursday's session. With the continued upward move, the Dow and the S&P 500 reached new one-month closing highs.

The major averages all closed firmly positive, although the Dow outperformed its counterparts. The Dow shot up 382.20 points or 1.1 percent to 35,294.76, while the Nasdaq rose 73.91 points or 0.5 percent to 14,897.34 and the S&P 500 climbed 33.11 points or 0.1 percent to 4,471.37.

With the advance seen over the past few sessions, the major averages more than offset the slump seen earlier in the week. For the week, the Nasdaq surged up by 2.2 percent, while the Dow and the S&P 500 jumped by 1.6 percent and 1.8 percent, respectively.

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Monday. Japan's Nikkei 225 Index dipped by 0.2 percent, while Hong Kong's Hang Seng Index rose by 0.3 percent.

The major European markets have also moved to the downside on the day. While the French CAC 40 Index has slumped by 1 percent, the German DAX Index is down by 0.8 percent and the U.K.'s FTSE 100 Index is down by 0.5 percent.

In commodities trading, crude oil futures are surging $1.30 to $83.58 a barrel after jumping $0.97 to $82.28 a barrel last Friday. Meanwhile, after plunging $29.60 to $1,768.30 an ounce in the previous session, gold futures are slipping $2.20 to $1,766.10 an ounce.

On the currency front, the U.S. dollar is trading at 114.33 yen versus the 114.13 yen it fetched at the close of New York trading on Friday. Against the euro, the dollar is trading at $1.1602 compared to last Friday's $1.1601.

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