WASHINGTON (dpa-AFX) - After turning in a strong performance last Friday, 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 just 0.1 percent.
Uncertainty about the near-term outlook for the markets may keep some traders on the sidelines after last week's strong gains lifted the Dow and the S&P 500 back within striking distance of the record highs set in mid-July.
The major averages have more than offset the steep drop seen early this month, as optimism about interest rate cuts by the Federal Reserve has overshadowed concerns about the economic outlook.
Comments from Fed Chair Jerome Powell last Friday all but confirmed the central bank will cut rates next month, although there remains some uncertainty about how quickly rates will be lowered.
According to CME Group's FedWatch Tool, there is a 65.5 percent chance of a quarter point rate cut at the September 17-18 meeting and a 34.5 percent chance of a half point rate cut.
On the U.S. economic front, the Commerce Department released a report showing a sharp increase by new orders for U.S. manufactured durable goods in the month of July.
The Commerce Department said durable goods orders spiked by 9.9 percent in July after tumbling by a revised 6.9 percent in June.
Economists had expected durable goods orders to jump by 4.0 percent compared to the 6.7 percent plunge that had been reported for the previous month.
The substantial rebound by durable goods orders came as orders for transportation equipment skyrocketed by 34.8 percent in July after plummeting by 20.6 percent in June.
Excluding the surge in orders for transportation equipment, durable goods orders dipped by 0.2 percent in July after inching up by 0.1 percent in June. Ex-transportation orders were expected to come in unchanged.
Following the pullback seen over the course of Thursday's session, stocks showed a strong move back to the upside during trading on Friday. The major averages all moved sharply higher, with the Dow and the S&P 500 reaching their best closing levels since reaching record highs in mid-July.
The major averages gave back ground after an early rally but showed another notable advance late in the session. The Dow jumped 462.30 points or 1.1 percent to 41,175.08, the Nasdaq surged 258.44 points or 1.5 percent to 17,877.79 and the S&P shot up 63.97 points or 1.2 percent to 5,634.61.
With the strong upward move on the day, the major averages all closed sharply higher for the week. The Dow shot up by 1.3 percent, the Nasdaq jumped by 1.4 percent and the S&P 500 surged by 1.5 percent.
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Monday. Japan's Nikkei 225 Index fell by 0.7 percent, while Hong Kong's Hang Seng Index jumped by 1.1 percent.
The major European markets have also turned mixed on the day, with the U.K. markets closed for a holiday. While the French CAC 40 Index is up by 0.3 percent, the German DAX Index is down by 0.1 percent.
In commodities trading, crude oil futures are soaring $2.20 to $77.03 a barrel after surging $1.82 to $74.83 a barrel last Friday. Meanwhile, after jumping $29.10 to $2,522.60 an ounce in the previous session, gold futures are climbing $13.50 to $2,559.80 an ounce.
On the currency front, the U.S. dollar is trading at 144.12 yen versus the 144.37 yen it fetched at the close of New York trading on Friday. Against the euro, the dollar is trading at $1.1161 compared to last Friday's $1.1192.
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