News Column

Stocks May Extend Recent Upward Trend In Early Trading - US Commentary

May 28, 2014

WASHINGTON (Alliance News) - Stocks may move to the upside in early trading on Wednesday, extending the upward trend seen over the past few sessions. The major index futures are currently pointing to a modestly higher open for the markets, with the Dow futures up by 18 points.

The markets may benefit from the recent upward momentum seen on Wall Street, which has lifted the S&P 500 to new record highs.

While the Dow is also climbing back toward the record highs set earlier this month, the tech-heavy Nasdaq has reached its best levels in almost two months.

Peter Boockvar, chief market analyst at the Lindsey Group, noted that there continues to be a difference in the attitudes between professional and individual investors.

"As measured by Investors Intelligence, the professional investor is widely bullish," Boockvar said. "Today, Bulls rose to 58.3 from 57.2, while Bears fell to 17.3 from 18.3. Bulls are just shy of the 3 readings seen in late December/early January, which were last seen in October '07, while bears are at 13 week lows."

Meanwhile, he added, "The new AAII read of the individual comes out tomorrow, but last week's Neutral camp was just shy of the highest since 2003, pointing to complete confusion."

A lack of major US economic data may lead to a lackluster performance in today's trading, with investors looking ahead to the release of reports on weekly jobless claims, pending home sales, and personal income and spending later in the week.

Among individual stocks, shares of PetroLogistics (PDH) are moving sharply higher in pre-market trading after the propylene producer agreed to be acquired by a subsidiary of Koch Industries in an all-cash transaction valued at approximately USD2.1 billion, including debt.

Luxury home builder Toll Brothers (TOL) is also likely to see early strength after reporting better than expected second quarter results.

On the other hand, shares of DWS Inc. (DWS) are likely to come under pressure after the discount shoe retailer reporter first quarter results that came in below estimates and cut its full-year guidance.

After moving mostly higher in early trading, stocks continued to perform well throughout the trading day on Tuesday. The gains on the day extended the recent upward move by the markets, with the S&P 500 reaching a new record closing high.

While the major averages all closed firmly in positive territory, the tech-heavy Nasdaq outperformed its counterparts. The Nasdaq jumped 51.26 point or 1.2% to 4,237.07, while the Dow rose 69.23 point or 0.4% to 16,675.50 and the S&P 500 climbed 11.38 points or 0.6% to 1,911.91.

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Wednesday. Japan'sNikkei 225 Index edged up by 0.2%, while Hong Kong'sHang Seng Index advanced by 0.6%.

Meanwhile, the major European markets are showing a lack of direction on the day. While the UK'sFTSE 100 Index has inched up by 0.1%, the French CAC 40 Index and the German DAX Index are just below the unchanged line.

In commodities trading, crude oil futures are edging down USD0.18 to USD103.93 a barrel after dipping USD0.24 to USD104.11 a barrel on Tuesday. Gold futures are slipping USD0.70 to USD1,264.80 an ounce. In the previous session, gold tumbled USD26.20 to USD1,265.50 an ounce.

On the currency front, the US dollar is trading at 101.83 yen compared to the 101.98 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is valued at USD1.3608 compared to yesterday's USD1.3635.

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Source: Alliance News