U.S. Stocks May Regain Ground Following Last Friday’s Sell-Off

Following the sharp pullback seen last Friday, 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 230 points.

Stocks appear poised to extend their recent roller coaster ride amid a continued flurry of speculative trading by retail investors.

Traders may look to pick up stocks at somewhat reduced levels after the markets saw their biggest weekly decline since October.

Nonetheless, worries the so-called “retail investor revolt” could be a precursor to a more sustained pullback may keep buying interest relatively subdued.

Not long after the start of trading, the Institute for Supply Management is scheduled to release its report on manufacturing activity in the month of January at 10 am ET.

The ISM’s manufacturing PMI is expected to edge down to 60.0 in January from 60.7 in December, although a reading above 50 would still indicate growth.

The Commerce Department is also due to release its report on construction spending in the month of December. Construction spending is expected to climb by 0.9 percent.

Stocks showed a substantial move back to the downside during trading on Friday, more than offsetting the notable rebound seen on Thursday. With the steep drop on the day, the Dow fell to its lowest closing level in well over a month.

The major averages all moved sharply lower for the session. The Dow plunged 620.74 points or 2 percent to 29,982.62, the Nasdaq plummeted 266.46 points or 2 percent to 13,070.69 and the S&P 500 tumbled 73.14 points or 1.9 percent to 3,714.24.

For the week, the Nasdaq sank by 3.5 percent, while the Dow and the S&P 500 both slumped by 3.3 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 1.6 percent, while Hong Kong’s Hang Seng Index surged up by 2.2 percent.

The major European markets have also shown strong moves to the upside on the day. While the U.K.’s FTSE 100 Index is up by 1 percent, the French CAC 40 Index and the German DAX Index are up by 1.4 percent and 1.5 percent, respectively.

In commodities trading, crude oil futures are rising $0.37 to $52.57 a barrel after edging down $0.14 to $52.20 a barrel last Friday. Meanwhile, after climbing $9.40 to $1,847.30 an ounce in the previous session, gold futures are jumping $17.70 to $1,865 an ounce.

On the currency front, the U.S. dollar is trading at 104.91 yen versus the 104.68 yen it fetched at the close of New York trading on Friday. Against the euro, the dollar is trading at $1.2088 compared to last Friday’s $1.2136.