By Investors Hub
The major U.S. index futures are pointing to a higher opening on Monday, with stocks likely to see further upside following the higher close seen last Friday.
The upward momentum on Wall Street comes as traders seem likely to continue to pick up stocks at reduced levels following recent weakness.
Trading activity may be somewhat subdued , however, with a lack of major U.S. economic data likely to keep some traders on the sidelines.
Following the sell-off seen last Thursday, stocks saw substantial volatility over the course of the trading session on Friday. The major averages showed wild swings as the day progressed before closing notably higher.
The major averages pulled back off their highs going into the close but remained in positive territory. The Dow surged up 330.44 points or 1.4 percent to 24,190.90, the Nasdaq jumped 97.33 points or 1.4 percent to 6,874.49 and the S&P 500 shot up 38.55 points 1.5 percent to 2,619.55.
Despite the advance on the day, the major averages moved sharply lower for the week. The Nasdaq plummeted by 5.1 percent, while the Dow and the S&P 500 both plunged by 5.2 percent.
The higher close on Wall Street was partly due to bargain hunting after the steep losses seen in the previous session dragged the major averages down to their lowest closing levels in about two months.
Traders may also have reacted positively to news that lawmakers managed to end a brief government shutdown with a bill raising spending caps and funding the government until March 23rd.
However, the volatility over the course of the session came amid lingering concerns about the outlook for interest rates.
Recent signs of rising inflation have led to worries that the Federal Reserve may raise rates faster than previously anticipated.
Traders largely shrugged off a report from the Commerce Department showing wholesale inventories increased by more than expected in the month of December.
The Commerce Department said wholesale inventories rose by 0.4 percent in December after climbing by a revised 0.6 percent in November. Economists had expected inventories to edge up by 0.2 percent.
Semiconductor stocks showed a significant move to the upside on the day, driving the Philadelphia Semiconductor Index up by 3.1 percent. The index rebounded after ending the previous session at its lowest closing level in four months.
Graphics chipmaker Nvidia (NVDA) posted a standout gain after reporting better than expected fourth quarter results and providing upbeat guidance.
Telecom, utilities and financial stocks also saw considerable strength, contributing to the higher close by the broader markets.
On the other hand, substantial weakness was visible among gold stocks, as reflected by the 2.2 percent slump by the NYSE Arca Gold Bugs Index.
Adedapo Adesanya