U.S. Stocks May Give Back Ground After Strong July

After ending yesterday’s lackluster session modestly higher, stocks may move back to the downside in early trading on Tuesday. The major index futures are currently pointing to a lower open for the markets, with the S&P 500 futures down by 0.5 percent.

Profit taking may contribute to initial weakness on Wall Street, as some traders look to cash in on the strong gains posted in July.

The tech-heavy Nasdaq soared by 4.1 percent for July, while the Dow and the S&P 500 jumped by 3.4 percent and 3.1 percent, respectively.

Early trading may also be impacted by reaction to quarterly results from drug giants Merck (MRK) and Pfizer (PFE) as well as ride-hailing giant Uber (UBER).

Overall trading activity may remain somewhat subdued, however, as traders continue to look ahead to Friday’s closely watched monthly jobs report.

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

The ISM’s manufacturing PMI is expected to inch up to 46.8 in July from 46.0 in June, although a reading below 50 would still indicate contraction.

The Commerce Department is also due to release its report on construction spending in the month of June. Construction spending is expected to rise by 0.6 percent in June after climbing by 0.9 percent in May.

Additionally, the Labor Department is also scheduled to release its report on job openings in the month of June. Job openings are expected to dip to 9.6 million in June from 9.8 million in May.

Stocks showed a lack of direction throughout the trading session on Monday, with the major averages spending the day bouncing back and forth across the unchanged line after last Friday’s trading firmly in positive territory.

The major averages moved to the upside going into the close, ending the day modestly higher. The Dow rose 100.24 points or 0.3 percent to 35,559.53, the Nasdaq crept up 29.37 points or 0.2 percent to 14,346.02 and the S&P 500 inched up 6.73 points or 0.2 percent to 4,588.96.

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Tuesday. Japan’s Nikkei 225 Index advanced by 0.9 percent, while Hong Kong’s Hang Seng Index fell by 0.3 percent.

Meanwhile, the major European markets have all moved to the downside on the day. While the U.K.’s FTSE 100 Index has dipped by 0.2 percent, the French CAC 40 Index and the German DAX Index are both down by 0.8 percent.

In commodities trading, crude oil futures are falling $0.50 to $81.30 a barrel after jumping $1.22 to $81.80 a barrel on Monday. Meanwhile, after rising $9.30 to $2,009.20 an ounce in the previous session, gold futures are slumping $19.70 to $1,989.50 an ounce.

On the currency front, the U.S. dollar is trading at 143.12 yen compared to the 142.29 yen it fetched at the close of New York trading on Monday. Against the euro, the dollar is valued at $1.0957 compared to yesterday’s $1.0997.

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