Futures Pointing To Mixed Open On Wall Street Amid Spike In Oil Prices

Following the strong upward move seen last week, the major U.S. stock indexes are likely to move in opposite directions in early trading on Monday.

The major index futures are currently pointing to a mixed open for the markets, with the Dow futures up by 0.3 percent but the S&P 500 futures down by 0.2 percent and the Nasdaq 100 futures down by 0.8 percent.

Early trading on Wall Street is likely to be impacted by reaction to a surge in crude oil prices, as crude for May delivery is soaring $4.64 or 6.1 percent to $80.31 a barrel.

The spike by the price of crude oil comes after OPEC and their oil-producing allies announced a surprise decision to reduce output by 1.16 million barrels per day.

A Saudi Arabian Ministry of Energy official called the output cut a “precautionary measure aimed at supporting the stability of the oil market.”

Energy stocks are likely to benefit from the jump in oil prices, with Dow component Chevron (CVX) surging by 4.2 percent in pre-market trading.

However, concerns about the impact on inflation and the global economy are likely to weigh on other sectors.

Shortly after the start of trading, The Institute for Supply Management is scheduled to release its report on manufacturing activity in the month of March.

The ISM’s manufacturing PMI is expected to edge down to 47.5 in March from 47.7 in February, with a reading below 50 indicating a contraction.

The Commerce Department is also due to release its report on construction spending in the month of February. Construction spending is expected to be unchanged.

Stocks moved sharply higher over the course of the trading session on Friday, adding to the gains posted on Wednesday and Thursday. The tech-heavy Nasdaq showed a particularly strong upward move, reaching a six-month closing high.

The major averages saw further upside going into the close of trading, reaching new highs for the session. The Nasdaq surged 208.44 points or 1.7 percent to 12,221.91, the S&P 500 shot up 58.48 points or 1.4 percent to 4,109.31 and the Dow jumped 415.12 points or 1.3 percent at 33,274.15.

For the week, the Dow spiked by 3.2 percent, while the Nasdaq and the S&P 500 soared by 3.4 percent and 3.5 percent, respectively.

The Nasdaq and the S&P 500 also posted strong gains for the quarter despite continued interest rate hikes by the Federal Reserve and recent turmoil in the banking sector.

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Monday. Japan’s Nikkei 225 Index climbed by 0.5perent, while China’s Shanghai Composite Index advanced by 0.7 percent.

Meanwhile, the major European markets are turning in a mixed performance on the day. While the German DAX Index has dipped by 0.2 percent, the French CAC 40 Index is up by 0.3 percent and the U.K.’s FTSE 100 Index is up by 0.6 percent.

In commodities trading, crude oil futures are soaring $4.64 to $80.31 a barrel after jumping $1.30 to $75.67 a barrel last Friday. Meanwhile, after falling $11.50 to $1,986.20 an ounce in the previous session, gold futures are tumbling rising $8.90 to $1,995.10 an ounce.

On the currency front, the U.S. dollar is trading at 133.02 yen versus the 132.86 yen it fetched at the close of New York trading on Friday. Against the euro, the dollar is trading at $1.0864 compared to last Friday’s $1.0839.

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