U.S. Stocks May See Continued Strength In Early Trading

After ending the previous session mostly higher, stocks are likely to see further upside in early trading on Tuesday. The major index futures are currently pointing to a modestly higher open for the markets, with the S&P 500 futures up by 0.2 percent.

Optimism about the outlook for interest rates may contribute to continued strength on Wall Street, as stocks appear poised to extend the upward trend seen over the past several sessions.

Potentially adding to the positive sentiment, San Francisco Federal Reserve President Mary Daly has said interest rate cuts are likely to be appropriate next year because of an improvement in inflation.

The Federal Reserve must make sure “we don’t give people price stability but take away jobs,” Daly told the Wall Street Journal in an interview.

Overall trading activity may be somewhat subdued, however, as traders look ahead to the release of several key economic reports in the coming days.

The Commerce Department’s report on personal income and spending is likely to be in focus, as it includes readings on inflation said to be preferred by the Fed.

The Commerce Department released a report this morning unexpected showing a substantial increase in new residential construction in the U.S. in the month of November.

The report said housing starts soared by 14.8 percent to an annual rate of 1.560 million in November after inching up by 0.2 percent to a downwardly revised rate of 1.359 million in October.

The surge surprised economists, who had expected housing starts to decrease by 0.9 percent to an annual rate of 1.360 million from the 1.372 million originally reported for the previous month.

Meanwhile, the Commerce Department said building permits slumped by 2.5 percent to an annual rate of 1.460 million in November after jumping by 1.8 percent to an upwardly revised rate of 1.498 million in October.

Building permits, an indicator of future housing demand, were expected to fall by 1.1 percent to an annual rate of 1.470 million from the 1.487 million originally reported for the previous month.

Stocks moved mostly higher over the course of the trading session on Monday, adding to the strong gains posted last week. The Nasdaq and the S&P 500 climbed firmly into positive territory, although the narrower Dow ended the day little changed.

While the Dow inched up 0.86 points or less than a tenth of a percent to 37,306.02, the Nasdaq rose 21.37 points or 0.5 percent to 4,740.56 and the S&P 500 climbed 90.89 points or 0.6 percent to 14,904.81.

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Tuesday. Japan’s Nikkei 225 Index jumped by 1.4 percent, while Australia’s S&P/ASX 200 Index advanced by 0.8 percent.

The major European markets have also moved to the upside on the day. While the German DAX Index has risen by 0.5 percent, the French CAC 40 Index and the U.K.’s FTSE 100 Index are both up by 0.1 percent.

In commodities trading, crude oil futures are slipping $0.07 to $72.40 a barrel after jumping $1.04 to $72.47 a barrel on Monday. Meanwhile, after edging up $4.80 to $2,040.50 an ounce in the previous session, gold futures are inching up $3 to $2,043.50 an ounce.

On the currency front, the U.S. dollar is trading at 144.39 yen compared to the 142.78 yen it fetched at the close of New York trading on Monday. Against the euro, the dollar is valued at $1.0955 compared to yesterday’s $1.0924.

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