U.S. Stocks May Lack Direction Following Recent Strength

After ending the previous session modestly higher, stocks may show a lack of direction in early trading on Wednesday. The major index futures are currently pointing to slightly higher open for the markets, with the Dow futures up by 37 points.

Uncertainty about the near-term outlook for the markets may keep some traders on the sidelines following the recent upward trend, which has lifted the Dow and the S&P 500 to new record highs.

With the Federal Reserve’s monetary policy meeting looming next week, traders may be reluctant to continue buying stocks, as the central bank could announce plans to begin scaling back its asset purchases.

A mixed reaction to the latest batch of earnings news may also lead to choppy trading on Wall Street, as traders digest results from a slew of big-name companies.

Shares of Coca-Cola (KO) are moving notably higher in pre-market trading after the beverage giant reported better than expected third quarter results and raised its full-year guidance.

Fast food giant McDonald’s (MCD) is also likely to see initial strength after reporting third quarter results that exceeded analyst estimates on both the top and bottom lines.

Shares of Microsoft (MSFT) and Twitter (TWTR) are also moving higher in pre-market trading after reporting better than expected quarterly earnings.

On the other hand, shares of Texas Instruments (TXN) are seeing significant pre-market weakness after the chipmaker reported third quarter revenues that missed analyst estimates.

Auto giant General Motors (GM) may also move to the downside after reporting third quarter earnings and revenues that fell year-over-year.

Meanwhile, shares of Google parent Alphabet (GOOGL) are nearly flat in pre-market trading after the company reported better than expected third quarter results.

On the U.S. economic front, the Commerce Department released a report showing durable goods orders pulled back by much less than expected in the month of September.

The Commerce Department said durable goods orders fell by 0.4 percent in September after jumping by a downwardly revised 1.3 percent in August.

Economists had expected durable goods orders to slump by 1.1 percent compared to the 1.8 percent spike that had been reported for the previous month.

Excluding a steep drop in orders for transportation equipment, durable goods orders climbed by 0.4 percent in September after rising by 0.3 percent in August. The increase matched economist estimates.

Stocks pulled back well off their best levels of the day but still managed to end Tuesday’s session modestly higher. With the uptick on the day, the Dow and the S&P 500 once again reached new record closing highs.

After rising by more than 150 points to a new record intraday high, the Dow ended the day up just 15.73 points or less than a tenth of a percent at 35,756.88. The Nasdaq also crept up 9.01 points or 0.1 percent to 15,235.72, while the S&P 500 edged up 8.31 points or 0.2 percent to 4,574.79.

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower on Wednesday. Japan’s Nikkei 225 Index closed just below the unchanged line, China’s Shanghai Composite Index slumped by 1 percent and Hong Kong’s Hang Seng Index tumbled by 1.6 percent.

The major European markets have also moved to the downside on the day. While the German DAX Index has fallen by 0.4 percent, the French CAC 40 Index is down by 0.3 percent and the U.K.’s FTSE 100 Index is down by 0.2 percent.

In commodities trading, crude oil futures are slumping $1.18 to $83.47 a barrel after advancing $0.89 to $84.65 a barrel on Tuesday. Meanwhile, an ounce of gold is trading at $1,793.70, up $0.30 compared to the previous session’s close of $1,793.40. On Tuesday, gold slid $13.40.

On the currency front, the U.S. dollar is trading at 113.64 yen compared to the 114.16 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is trading at $1.1620 compared to yesterday’s $1.1596.