U.S. Stocks May Open Higher Amid Easing Worries About U.S.-Iran Tensions
Stocks may move to the upside in early trading on Tuesday, extending the upward move seen over the course of the previous session. The major index futures are currently pointing to a modestly higher open for the markets, with the Dow futures up by 16 points.
The markets may continue to benefit from easing concerns about rising tensions between the U.S. and Iran following the U.S. airstrike that killed top Iranian military commander Qasem Soleimani.
Iran has vowed to take revenge against the U.S. for the killing of Soleimani, but the lack of an immediate response has offset some of the worries that plagued the markets last Friday.
Traders seem optimistic that the war of words between Washington and Tehran will not escalate into a full-fledged military conflict.
The notable pullback by the markets last Friday is subsequently being viewed as a temporary blip in the recent upward momentum that has continually propelled stocks to new record highs.
On the U.S. economic front, the Commerce Department released a report showing the U.S. trade deficit narrowed significantly in the month of November amid an increase in exports and a decrease in imports.
The report said the trade deficit narrowed to $43.1 billion in November from a revised $46.9 billion in October. Economists had expected the deficit to narrow to $43.8 billion from the $47.2 billion originally reported for the previous month.
The narrower trade deficit came as the value of exports climbed by 0.7 percent to $208.6 billion, while the value of imports slumped by 1.0 percent to $251.7 billion.
Shortly after the start of trading, the Institute for Supply Management is scheduled to release its report on activity in the service sector in the month of December.
The ISM’s non-manufacturing index is expected to inch up to 54.5 in December after dipping to 53.9 in November, with a reading above 50 indicating growth in service sector activity.
The Commerce Department is also due to release its report on new orders for manufactured goods in the month of November. Factory orders are expected to decrease by 0.8 percent.
After showing a notable move to the downside at the start of trading on Monday, stocks showed a significant rebound over the course of the session. The major averages all climbed well off their early lows and into positive territory.
The major averages saw further upside going into the close, ending the session at their best levels of the day. The Dow rose 68.50 points or 0.2 percent to 28,703.38, the Nasdaq advanced 50.70 points or 0.6 percent to 9,071.47 and the S&P 500 climbed 11.43 points or 0.4 percent to 3,246.28.
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Tuesday. Japan’s Nikkei 225 Index surged up by 1.6 percent, while China’s Shanghai Composite Index advanced by 0.7 percent.
The major European markets have also moved to the upside on the day. While the German DAX Index has advanced by 0.8 percent, the French CAC 40 Index and the U.K.’s FTSE 100 Index are rising by 0.3 percent and 0.2 percent, respectively.
In commodities trading, crude oil futures are sliding $0.44 to $62.83 a barrel after rising $0.22 to $63.27 a barrel on Monday. Meanwhile, after jumping $16.40 to $1,568.80 an ounce in the previous session, gold futures are slipping $0.30 to $1,568.50 an ounce.
On the currency front, the U.S. dollar is trading at 108.45 yen compared to the 108.37 yen it fetched at the close of New York trading on Monday. Against the euro, the dollar is valued at $1.1168 compared to yesterday’s $1.1197.
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