U.S. Stocks May Show A Lack Of Direction In Early Trading

After seeing considerable volatility over the two previous sessions, stocks may show a lack of direction in early trading on Wednesday. The major index futures are currently pointing to a roughly flat open for the markets, with the Dow futures down by just 4 points.

Traders may be reluctant to make significant moves amid uncertainty about the near-term outlook for the markets following the wild swings seen to start the week.

The major averages ended a volatile session in negative territory on Monday before rebounding to end another choppy session higher on Tuesday.

The Dow reached a nearly three-month intraday high in early trading on Tuesday before pulling back to end the day little changed.

Uncertainty about the outlook for interest rates may also contribute to another choppy session, as traders react to mixed comments from Federal Reserve officials as well as the latest U.S. economic data.

The Commerce Department released a report this morning showing a significant increase in U.S. retail sales in the month of October.

The report showed retail sales surged by 1.3 percent in October after coming in unchanged in September. Economists had expected retail sales to jump by 1.0 percent.

Excluding a sharp increase in sales by motor vehicle and parts dealers, retail sales still shot up by 1.3 percent in October after inching up by 0.1 percent in September. Ex-auto sales were expected to rise by 0.4 percent.

A separate report released by the Labor Department showed a modest decrease in U.S. import prices in the month of October.

The Labor Department said import prices edged down by 0.2 percent in October after tumbling by a revised 1.1 percent in September.

Economists had expected import prices to fall by 0.4 percent compared to the 1.2 percent slump originally reported for the previous month.

Meanwhile, the report showed export prices dipped by 0.3 percent in October after plunging by a revised 1.5 percent in September.

Export prices were expected to decline by 0.4 percent compared to the 0.8 percent decrease originally reported for the previous month.

Just before the start of trading, the Federal Reserve is scheduled to release its report on industrial production in the month of October. Industrial production is expected to inch up by 0.2 percent in October after rising by 0.4 percent in September.

The National Association of Home Builders is also due to release its report on homebuilder confidence in the month of November shortly after the open. The housing market index is expected to dip to 36 in November from 38 in October.

Additionally, the Commerce Department is scheduled to release its report on business inventories in the month of September at 10 am ET. Business inventories are expected to increase by 0.5 percent.

After showing a substantial move to the upside in early trading on Tuesday, stocks gave back ground over the course of the trading session but managed to close mostly higher.

The tech-heavy Nasdaq jumped 162.19 points or 1.5 percent to a nearly two-month closing high of 11,358.41 percent, while the S&P 500 advanced 34.48 points or 0.9 percent to 3,991.73.

Meanwhile, the narrower Dow inched up 56.22 points or 0.2 percent to 33,592.92 after surging 450 points in early trading to its best intraday level in almost three months.

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Wednesday. China’s Shanghai Composite Index and Hong Kong’s Hang Seng Index both fell by 0.5 percent, while Japan’s Nikkei 225 Index bucked the downtrend and crept up by 0.1 percent.

The major European markets have also moved to the downside on the day. While the German DAX Index has slumped by 0.9 percent, the French CAC 40 Index is down by 0.5 percent and the U.K.’s FTSE 100 Index is down by 0.2 percent.

In commodities trading, crude oil futures are sliding $0.82 to $86.10 a barrel after jumping $1.05 to $86.92 a barrel on Tuesday. Meanwhile, an ounce of gold is trading at $1,782.50, up $5.70 compared to the previous session’s close of $1,776.80. On Tuesday, gold edged down $0.10.

On the currency front, the U.S. dollar is trading at 139.72 yen compared to the 139.28 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is trading at $1.0405 compared to yesterday’s $1.0349.