U.S. Stocks May See Further Upside In Early Trading

Following the strong upward move seen last week, stocks are likely to see further 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 39 points.

The upward momentum on Wall Street comes as traders continue to look to pick up stocks at relatively reduced levels following recent weakness.

Some traders feel the sell-off in response to monetary policy tightening around the world was overdone, offering good opportunities to hunt for bargains.

Buying interest may be somewhat subdued, however, as concerns about inflation and a potential recession continue to hang over the markets.

On the economic front, the Commerce Department released a report showing new orders for U.S. manufactured durable goods increased by more than expected in the month of May.

The report showed durable goods orders climbed by 0.7 percent in May after rising by 0.4 percent in April. Economists had expected orders to inch up by 0.1 percent.

Excluding an advance in orders for transportation equipment, durable goods orders still rose by 0.7 percent in May after edging up by 0.2 percent in April. Ex-transportation orders were expected to rise by 0.3 percent.

Shortly after the start of trading, the National Association of Realtors is scheduled to release its report on pending home sales in the month of May. Pending home sales are expected to plunge by 4.0 percent in May after plummeting by 3.9 percent in April.

Stocks moved sharply higher during trading on Friday, extending the strong upward move seen going into the close of trading on Thursday. The major averages all showed substantial upward moves over the course of the session.

The major averages saw further upside in late-day trading, ending the session at their best levels of the day. The Dow jumped 823.32 points or 2.7 percent to 31,500.68, the Nasdaq surged 375.43 points or 3.3 percent to 11,607.62 and the S&P 500 shot up 116.01 points or 3.1 percent to 3,911.74.

With the extended rally, the major averages snapped a three-week losing streak. For the holiday-shortened week, the Nasdaq soared by 7.5 percent, while the S&P 500 and the Dow spiked by 6.4 percent and 5.4 percent, respectively.

In overseas trading, stock markets across the Asia-Pacific region moved notably higher during trading on Monday. Japan’s Nikkei 225 Index jumped by 1.4 percent, while Hong Kong’s Hang Seng Index surged by 2.4 percent.

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

In commodities trading, crude oil futures are rising $0.18 to $107.80 a barrel after surging $3.35 to $107.62 a barrel last Friday. Meanwhile, after inching up $0.50 to $1830.30 an ounce in the previous session, gold futures are edging up $1.20 to $1,831.50 an ounce.

On the currency front, the U.S. dollar is trading at 135.46 yen versus the 135.23 yen it fetched at the close of New York trading on Friday. Against the euro, the dollar is trading at $1.0556 compared to last Friday’s $1.0553.

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