News Column

Stocks May Give Back Ground In Early Trading - US Commentary

July 7, 2014

WASHINGTON (Alliance News) - After turning in a strong performance last week, stocks may give back some ground in early trading on Monday. The major index futures are currently pointing to a lower open for the markets, with the Dow futures down by 34 points.

Profit taking is likely to contribute to any early weakness on Wall Street following the recent upward move by the markets.

Last week's gains lifted the Dow and the S&P 500 to new record highs, while the Nasdaq reached its best levels since 2000.

Worries about the outlook for interest rates may also weigh on the markets following last Thursday's much better than expected jobs data.

Nonetheless, trading activity may be somewhat subdued amid the absence of any major US economic reports on the day.

The economic calendar remains sparse throughout the week, although traders are likely to keep an eye on several speeches by Federal Reserve officials as well as the minute of the latest Fed meeting.

"These speeches are important because the Fed is going to have to do a better job of explaining to markets the math in their forecasts because they are falling further behind the reality of the data," said Peter Boockvar, chief market analyst at the Lindsey Group.

He added, "Janet Yellen's uber dovishness is of course well entrenched in the psyche of Wall Street, but what happens to her standing in the eyes of the markets if she doesn't pivot when the facts change?"

Additionally, aluminum giant Alcoa (AA) is scheduled to release its second quarter results after the close of trading of Tuesday.

The release of results from Alcoa is typically seen as the unofficial start of earnings season, although the reporting season won't really start to pick up until next week.

After moving moderately higher in early trading, stocks saw some further upside over the course of the abbreviated trading day on Thursday. The markets benefited from a positive reaction to better than expected employment data.

The major averages ended the day firmly in positive territory, with the Dow closing above 17,000 for the first time. The Dow rose 92.02 points or 0.5% to 17,068.26, the Nasdaq advanced 28.19 points or 0.6% to 4,485.93 and the S&P 500 climbed 10.82 points or 0.6% to 1,985.44.

For the week, the major averages all posted notable gains. The Nasdaq surged up by 2%, while the Dow and the S&P 500 jumped by 1.3% and 1.2%, respectively.

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Source: Alliance News

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