Futures Pointing To Modestly Higher Open On Wall Street

The major U.S. index futures are currently pointing to a modestly higher open on Tuesday, with stocks likely to add to the slim gains posted in the previous session.

Traders may once again look to go bargain hunting following recent weakness, as stocks are poised to close notably lower for the month of February.

Buying interest waned after an early rally on Monday, however, as concerns about the outlook for interest rates continue to hang over the markets.

Overall trading activity may also be somewhat subdued as traders look ahead to some more closely watched economic data in the coming days.

Traders are likely to keep an eye on reports on weekly jobless claims and manufacturing and service sector activity.

The data could shed additional light on the strength of the economy and provide further clues about how much the Federal Reserve is likely to raise interest rates.

After moving sharply higher early in the session, stocks gave back ground over the course of the trading day on Monday. The major averages pulled back well off their early highs but managed to close in positive territory.

The Dow surged more than 360 points in early trading but ended the day up by just 72.17 points or 0.2 percent at 32,889.09. The Nasdaq climbed 72.04 points or 0.6 percent to 11,466.98 and the S&P 500 rose 12.20 points or 0.3 percent to 3,982.24.

The early rally on Wall Street partly reflected bargain hunting, as some traders looked to pick up stocks at reduced levels following the steep drop seen last week.

The sell-off seen last Friday dragged the Dow down to a two-month closing low, while the S&P 500 tumbled to its lowest closing level in over a month.

For the holiday-shortened week, the S&P 500 dove by 2.7 percent, while the Dow and the Nasdaq plummeted by 3.0 percent and 3.3 percent, respectively.

However, buying interest waned over the course of the session, as traders continue to express concerns about the outlook for interest rates.

Recent economic data has led to worries the Federal Reserve will raise rates more than currently anticipated and hold rates at an elevated level for an extended period.

On the U.S. economic front, the Commerce Department released a report showing a sharp pullback in new orders for durable goods in the month of January.

The report said durable goods orders plunged by 4.5 percent in January after surging by a downwardly revised 5.1 percent in December.

Economists had expected durable goods orders to tumble by 4.0 percent compared to the 5.6 percent spike that had been reported for the previous month.

The steep drop by durable goods orders came as orders for transportation equipment plummeted by 13.3 percent in January after soaring by 15.8 percent in December.

Excluding orders for transportation equipment, durable goods orders climbed by 0.7 percent in January after falling by 0.4 percent in December. Economists had expected a 0.1 percent uptick.

Meanwhile, the National Association of Realtors released a separate report showing pending home sales in the U.S. spiked by much more than expected in the month of January.

NAR said its pending home sales index soared by 8.1 percent to 82.5 in January after jumping by 1.1 percent to a downwardly revised 76.3 in December.

Economists had expected pending home sales to advance by 1.0 percent compared to the 2.5 percent surge originally reported for the previous month.

Oil service stocks turned in a strong performance on the day, driving the Philadelphia Oil Service Index up by 1.4 percent. The strength among oil service stocks came despite a decrease by the price of crude oil.

Significant strength was also visible among transportation stocks, as reflected by the 1.3 percent gain posted by the Dow Jones Transportation Average.

Union Pacific (UNP) led the sector higher, soaring by 10.1 percent after the railroad said it expects to name a successor to CEO Lance Fritz later this year.

Steel stocks also saw considerable strength on the day, resulting in a 1.3 percent advance by the NYSE Arca Steel Index.

Commodity, Currency Markets

Crude oil futures are jumping $1.79 to $77.47 a barrel after falling $0.64 to $75.68 a barrel on Monday. Meanwhile, after climbing $7.80 to $1,824.90 an ounce in the previous session, gold futures are sliding $9.30 to $1,815.60 an ounce.

On the currency front, the U.S. dollar is trading at 136.86 yen compared to the 136.19 yen it fetched at the close of New York trading on Monday. Against the euro, the dollar is valued at $1.0620 compared to yesterday’s $1.0609.

Asia

Asian stocks ended mostly higher on Tuesday as China recovery hopes outweighed concerns about further increases in U.S. interest rates.

Chinese shares fluctuated before finishing higher ahead of a reading on the Purchasing Managers’ Index (PMI) due to be released on Wednesday.

The benchmark Shanghai Composite Index closed 0.7 percent higher at 3,279.61, while Hong Kong’s Hang Seng Index dropped 0.8 percent to 19,785.94 after data showed exports plummeted nearly 37 percent in January – marking their worst drop in 70 years.

In another development, the city’s Chief Executive John Lee announced plans to drop its mask mandate starting March 1.

Japanese shares gave up early gains to end on a flat note as factory output posted its biggest fall in eight months due to declining overseas demand.

The Nikkei 225 Index and the broader Topix both finished marginally higher at 27,445.56 and 1,993.28, respectively. While shipping firms led losses, real estate and technology stocks closed mostly higher.

Japan Post Bank advanced 1.7 percent after Japan Post Holdings said it would reduce its stake in the banking unit.

Seoul stocks posted modest gains, led by large-cap financials and tech stocks. The Kospi edged up 0.4 percent to close at 2,412.85.

Australian markets ended higher after data showed retail sales rose more than expected in January. The benchmark S&P/ASX 200 Index gained 0.5 percent to settle at 7,258.40, while the broader All Ordinaries Index ended 0.5 percent higher at 7,458.

Mining and energy stocks topped the gainers list after the release of positive U.S. economic data.

Europe

European stocks are turning in a mixed performance on Tuesday after inflation figures from France and Spain came in hotter than expected for February, with price rises picking up pace both on an annual and sequential basis.

The annual inflation rate in France rose to 7.2 percent in February, up from 7.0 percent in January as a result of rising food prices, preliminary data showed.

Spanish consumer price inflation increased an annual 6.1 percent in February, accelerating from 5.9 percent during the 12 months to January.

Christine Lagarde, President of the European Central Bank (ECB), said in an interview that the central bank is data dependent and will decide on rate hikes later after a 50 basis point increase in March.

While the U.K.’s FTSE 100 Index is down by 0.5 percent, the French CAC 40 Index is up by 0.2 percent and the German DAX Index is up by 0.3 percent.

The British pound held onto Monday’s gains after Prime Minister Rishi Sunak signed a new trade deal with the European Union designed to remedy problems caused by the Northern Ireland Protocol.

Credit Suisse has dropped. According to the Swiss financial watchdog FINMA, the lender has “seriously breached its supervisory obligations” in the context of its business relationship with financier Lex Greensill and his companies.

Adecco Group has also moved lower. The provider of human resources solutions reported that its fourth-quarter net income was 65 million euros, down 65 percent from last year’s 184 million euros.

British online grocer Ocado has plunged after posting a pre-tax loss of £501 million for the year to December 31, 2022.

Likewise, building materials giant Travis Perkins has moved sharply lower after posting disappointing annual earnings.

German pharmaceutical and life sciences major Bayer Group has also tumbled after its fourth-quarter net income dropped 47.4 percent to 611 million euros from 1.16 billion euros a year ago.

Meanwhile, Serco Group, a provider of public services, has jumped after reporting a rise in earnings for 2022, amidst an increase in revenue.

BayWa AG shares have also risen after the operator in the agriculture, building materials and energy sectors reported significantly higher earnings and revenues in its fiscal 2022.

Aixtron AG, a technology firm, has also surged after posting improved annual earnings, reflecting an increase in revenue, driven by higher order intake.

U.S. Economic Reports

Standard & Poor’s is scheduled to release its report on home prices in major metropolitan areas in the month of December at 9 am ET.

At 9:45 am ET, MNI Indicators is due to release its report on Chicago-area business activity in the month of February.

The Chicago business barometer is expected to inch up to 45.0 in February from 44.3 in January, although a reading below 50 would still indicate a contraction.

The Conference Board is scheduled to release its report on consumer confidence in the month of February at 10 am ET. The consumer confidence index is expected to tick up to 108.5 in February from 107.1 in January.

At 2:30 pm ET, Chicago Federal Reserve President Austan Goolsbee is due to speak at Ivy Tech Community College on its Elkhart campus.

Stocks In Focus

Shares of Zoom Video (ZM) are seeing significant pre-market strength after the video communications company reported better than expected fourth quarter results and provided upbeat earnings guidance.

Telehealth company Hims & Hers Health (HIMS) is also likely to move to the upside after reporting fourth quarter results that exceeded analyst estimates on both the top and bottom lines.

On the other hand, shares of Norwegian Cruise Line Holdings (NCLH) may come under pressure after the company reported a wider than expected fourth quarter loss.