U.S. Stocks May Regain Ground In Early Trading

Following the sell-off seen in the previous session, stocks are likely to move back to the upside in early trading on Monday. The major index futures are currently pointing to a higher open for the markets, with the Dow futures up by 285 points.

Bargain hunting may contribute to initial strength on Wall Street after the steep drop seen last Friday dragged the major averages down to their lowest closing levels in at least a month.

Travel-related stocks may help lead an early rebound despite lingering concerns about new travel restrictions following the detection of a new coronavirus variant.

The new Covid variant, assigned the Greek letter omicron, has been labeled a “variant of concern” by the World Health Organization.

The WHO described the global risk posed by the omicron variant as “very high” due to a high number of mutations that “may be associated with immune escape potential and higher transmissibility.”

However, the South African doctor who treated early cases of the new variant told the BBC countries could be “panicking unnecessarily” and the symptoms she had seen were “extremely mild.”

Shortly after the start of trading, the National Association of Realtors is scheduled to release its report on pending home sales in the month of October. Pending home sales are expected to increase by 1.0 percent.

A pending home sale is one in which a contract was signed but not yet closed. Normally, it takes four to six weeks to close a contracted sale.

After turning higher over the course of Wednesday’s session, stocks showed a substantial move back to the downside during post-holiday trading on Friday. With the steep drop on the day, the major averages fell to their lowest closing levels in at least a month.

The major averages all finished the day sharply lower. The Dow tumbled 905.04 points or 2.5 percent to 34,899.34, the Nasdaq slumped 353.57 points or 2.2 percent to 15,491.66 and the S&P 500 sank 106.84 points or 2.3 percent to 4,594.63.

For the holiday-interrupted week, the Nasdaq plummeted by 3.5 percent, while the S&P 500 and the Dow plunged by 2.2 percent and 2.0 percent, respectively.

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Monday. Japan’s Nikkei 225 Index tumbled by 1.6 percent, while Hong Kong’s Hang Seng Index slumped by 1 percent.

Meanwhile, the major European markets have all moved to the upside on the day. While the German DAX Index has advanced by 0.7 percent, the U.K.’s FTSE 100 Index and the French CAC 40 Index are both up by 1.3 percent.

In commodities trading, crude oil futures are spiking $4.23 to $72.38 a barrel after plummeting $10.24 to $68.15 a barrel last Friday. Meanwhile, after inching up $1.20 to $1,788.10 an ounce in the previous session, gold futures are rising $2.90 to $1,791 an ounce.

On the currency front, the U.S. dollar is trading at 113.72 yen versus the 113.38 yen it fetched at the close of New York trading on Friday. Against the euro, the dollar is trading at $1.1267 compared to last Friday’s $1.1317.