U.S. Stocks May Lack Direction Following Last Friday’s Rally

Following the strong upward move seen during last Friday’s session, stocks may show a lack of direction in early trading on Monday. The major index futures are currently pointing to a roughly flat open for the markets, with the S&P 500 futures up by less than a tenth of a percent.

Traders may be reluctant to make significant moves amid what is likely to be a relatively quiet week due to the Christmas Day holiday on Wednesday.

The markets are also scheduled to close earlier than usual for Christmas Eve on Tuesday, leading to below average trading activity.

Uncertainty about the near-term outlook for the markets may also keep some traders on the sidelines following the volatility seen last week.

The economic calendar for the week is also relatively quiet, although reports on durable goods orders, new home sales and weekly jobless claims may still attract attention.

Shortly after the start of today’s trading, the Conference Board is due to release its report on consumer confidence in the month of December. The consumer confidence index is expected rise to 113.0 in December after climbing to 111.7 in November.

After ending Thursday’s session little changed, stocks moved sharply higher over the course of the trading day on Friday. The major averages recovered from initial weakness and climbed firmly into positive territory as the day progressed.

The Dow surged 498.02 points or 1.2 percent to 42,840.26, adding to the slim gain posted in Thursday’s session, when the blue chip index snapped a ten-day losing streak.

The tech-heavy Nasdaq also jumped 199.83 points or 1.0 percent to 19,572.60 and the S&P 500 shot up 63.77 points or 1.1 percent to 5,930.85.

Despite the strong upward move on the day, the major averages posted notable losses for the week. The Dow plunged by 2.3 percent, the S&P 500 tumbled by 2.0 percent and the Nasdaq slumped by 1.8 percent.

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Monday. Japan’s Nikkei 225 Index jumped by 1.2 percent, while Hong Kong’s Hang’s Seng Index advanced by 0.8 percent.

Meanwhile, European stocks are seeing modest strength on the day. The U.K.’s FTSE 100 Index is up by 0.3 percent and the French CAC 40 Index is up by 0.2 percent, while the German DAX Index is nearly unchanged.

In commodities trading, crude oil futures are slipping $0.27 to $69.19 a barrel after inching up $0.08 to $69.46 a barrel last Friday. Meanwhile, after surging $37 to $2,645.10 an ounce in the previous session, gold futures are falling $15.20 to $2,629.90 an ounce.

On the currency front, the U.S. dollar is trading at 157.19 yen versus the 156.31 yen it fetched at the close of New York trading on Friday. Against the euro, the dollar is trading at $1.0394 compared to last Friday’s $1.0430.