By Investors Hub
The major U.S. index futures are pointing to a higher opening on Tuesday, with stocks likely to regain some ground after moving mostly lower over the course of the previous session.
The markets may benefit from bargain hunting following the weakness seen in the technology sector over the past few days.
Positive sentiment may also be generated by a report from the Commerce Department showing personal income and spending both increased in line with economist estimates in the month of June.
Overall trading activity may be somewhat subdued, however, as traders look ahead to the Federal Reserve?s money policy announcement Wednesday afternoon.
While the Fed is widely expected to leave interest rates unchanged, the accompanying statement is likely to be closely examined for any hints about future rate hikes.
Stocks moved mostly lower over the course of the trading session on Monday, with technology stocks leading the way after seeing considerable weakness late last week. The tech-heavy Nasdaq pulled back further off the record closing high set last Wednesday.
The major averages all closed in negative territory, although the Nasdaq underperformed its counterparts. While the Nasdaq tumbled 107.42 points or 1.4 percent to 7,630.00, the Dow slid 144.23 points or 0.6 percent to 25,306.82 and the S&P 500 fell 16.22 points or 0.6 percent to 2,802.60.
The weakness on Wall Street came as tech stocks saw further downside, with Twitter (TWTR), Netflix (NFLX), Facebook (FB) and Amazon (AMZN) all moving sharply lower.
Twitter plunged by 8 percent and Netflix slumped by 5.7 percent, while Facebook and Amazon fell by 2.2 percent and 2.1 percent, respectively.
Shares of Caterpillar (CAT) also moved to the downside even though the heavy equipment maker reported better than expected second quarter earnings and raised its full-year guidance.
Caterpillar also said it expects recently imposed tariffs to impact operating profit in the second half by up to $200 million but said it intends to largely offset the impacts with price increases.
In U.S. economic news, the National Association of Realtors released a report showing a much bigger than expected rebound in pending home sales in the month of June.
NAR said its pending home sales index climbed by 0.9 percent to 106.9 in June after falling by 0.5 percent to 105.9 in May. Economists had expected pending home sales to inch up by 0.1 percent.
Despite the much bigger than expected increase, pending home sales in June were down by 2.5 percent compared to the same month a year ago, reflecting the sixth straight year-over-year decrease.
A pending home sale is one in which a contract was signed but not yet closed. Normally, it takes four to six weeks to close a contracted sale.
Brokerage stocks moved notably lower over the course of the trading session, dragging the NYSE Arca Broker/Dealer Index down by 1.4 percent.
Considerable weakness also remained visible among biotechnology stocks, as reflected by the 1.4 percent loss posted by the NYSE Arca Biotechnology Index. The index extended the 1.9 percent slump seen last Friday.
Retail, semiconductor, and computer hardware stocks also moved to the downside on the day, while energy stocks moved higher along with the price of crude oil.
Reflecting the strength in the energy sector, the Philadelphia Oil Service Index surged up by 1.7 percent, the NYSE Arca Natural Gas Index climbed by 1.3 percent and the NYSE Arca Oil Index rose by 1 percent.
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