News Column

Stocks May Open Higher In Reaction To Earnings News - US Commentary

July 29, 2014

WASHINGTON (Alliance News) - After ending the previous session roughly flat, stocks are likely to move to the upside in early trading on Tuesday. The major index futures are currently pointing to a higher open for the markets, with the Dow futures up by 44 points.

The upward momentum for the markets partly reflects a positive reaction to the latest batch of earnings news, including quarterly results from drug giants Merck (MRK) and Pfizer (PFE).

Shares of Merck are moving notably higher in pre-market trading after the company reported better than expected second quarter results on strong sales of its newer drugs.

Pfizer is seeing more modest pre-market strength after reporting second quarter adjusted earnings that beat analyst estimates despite a sharp drop in net income.

On the other hand, shares of UPS (UPS) may come under pressure after the delivery giant reported weaker than expected second quarter earnings and cuts its full-year guidance.

Trading activity may remain somewhat subdued, however, as traders may be reluctant to make any significant moves ahead of the Federal Reserve's announcement of its latest monetary policy decision on Wednesday.

The Fed is widely expected to announce another USD10 billion reduction in the pace of its asset purchases, slowing the pace of purchases to USD25 billion a month.

Traders are likely to pay close attention to the Fed's accompanying statement, looking for indications regarding the outlook for interest rates.

Nonetheless, trading could be impacted by the release of a report from Standard & Poor's on home prices in major metropolitan areas in the month of May. The report is due to be released at 9 am ET,

The Conference Board is also scheduled to release a report on consumer confidence in the month of July at 10 am ET. The consumer confidence index is expected to inch up to 85.4.

Stocks showed a significant recovery over the course of the trading day on Monday after coming under pressure in early trading. The markets eventually ended the session roughly flat following the mixed performance that was seen last week.

The major averages finished the day on opposite sides of the unchanged line. While the Nasdaq edged down 4.65 points or 0.1% to 4,444.91, the Dow crept up 22.02 points or 0.1% to 16,982.59 and the S&P 500 inched up 0.57 points or less than a tenth of a % to 1,978.91.

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Tuesday. Japan'sNikkei 225 Index rose by 0.6%, while Hong Kong'sHang Seng Index advanced by 0.9%.

The major European markets have also moved to the upside on the day. While the UK'sFTSE 100 Index has climbed by 0.6%, the German DAX Index and the French CAC 40 Index are up by 0.8% and 0.9%, respectively.

In commodities trading, crude oil futures are sliding USD0.87 to USD100.80 a barrel after slipping USD0.42 to USD101.67 a barrel on Monday. Meanwhile, gold futures are climbing USD4.90 to USD1,308.20 an ounce. On Monday, gold ended unchanged at USD1,303.30 an ounce.

Among currencies, the US dollar is trading at 102.07 yen compared to the 101.86 yen it fetched at the close of New York trading on Monday. Against the euro, the dollar is trading at USD1.3423 compared to yesterday's USD1.3440.

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Source: Alliance News

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