By Investors Hub
The major U.S. index futures are pointing to a lower opening on Tuesday, with stocks likely to give back ground on the heels of recent strength.
Profit taking may contribute to initial weakness on Wall Street following the strong upward move shown by stocks last week.
The advance seen last Friday lifted the Dow and the Nasdaq to their best closing levels in three months and the S&P 500 reached a two-month closing high.
Uncertainty about the potential for a trade deal between the U.S. and China may also weigh on the markets as the next round of trade talks get underway in Washington, D.C. this week.
News that China accused the U.S. of attempting to curtail its technology development by putting pressure on allies to shun networks supplied by Huawei Technologies has raised concerns about tensions between the world?s two largest economies.
Selling pressure may be somewhat subdued, however, with a significant advance by Walmart (WMT) likely to help limit the downside for the markets.
Shares of Walmart are moving notably higher in pre-market trading after the retail giant reported fourth quarter results that exceeded analyst estimates on both the top and bottom lines.
Following the mixed performance seen on Thursday, stocks moved mostly higher over the course of the trading day on Friday.
The major averages all closed firmly positive, although the Dow outperformed its counterparts. The Dow soared 443.86 points or 1.7 percent to 25,883.25, the Nasdaq climbed 45.46 points or 0.6 percent to 7,472.41 and the S&P 500 jumped 29.87 points or 1.1 percent to 2,775.60.
With the advance on the day, the major averages all moved higher for the week. The Dow spiked by 3.1 percent, while the Nasdaq and the S&P 500 shot up by 2.4 percent and 2.5 percent, respectively.
The strength on Wall Street came amid continued optimism about trade talks between the U.S. and China, the world’s two largest economies.
A statement from the White House said high level U.S.-China trade talks this week led to “progress between the two parties” but noted “much work remains.”
The White House said the U.S. hopes to see additional progress as discussions at the ministerial and vice-ministerial levels continue in Washington next week.
Traders also reacted positively to news that lawmakers and President Donald Trump managed to avoid another government shutdown.
Trump still decided to declare a national emergency to obtain additional funds for his controversial border wall, although the move is not likely to have an immediate impact as it will face significant legal challenges.
Optimism about the economic outlook was also generated by preliminary data from the University of Michigan showing a bigger than expected rebound in consumer sentiment in the month of February.
The report said the consumer sentiment index climbed to 95.5 in February after tumbling to 91.2 in January. Economists had expected the index to rise to 93.0.
Surveys of Consumers chief economist Richard Curtin said the rebound in consumer sentiment reflected the end of the partial government shutdown as well as a more fundamental shift in consumer expectations due to the Federal Reserve’s pause in raising interest rates.
Meanwhile, traders largely shrugged off a report from the Federal Reserve showing an unexpected decrease in industrial production in January.
The Fed said industrial production fell by 0.6 percent in January after inching up by a downwardly revised 0.1 percent in December.
Economists had expected production to tick up by 0.1 percent compared to the 0.3 percent increase originally reported for the previous month.
The unexpected drop in industrial production came as manufacturing output slumped by 0.9 percent in January after climbing by 0.8 percent in December.
Telecom stocks moved sharply higher over the course of the trading session, driving the NYSE Arca North American Telecom Index up by 2.6 percent. With the jump, the index ended the session at its best closing level in over two months.
Significant strength among emerged among energy stocks, which moved to the upside along with the price of crude oil.
Reflecting the strength in the energy sector, the Philadelphia Oil Service Index spiked by 2.6 percent, the NYSE Arca Natural Gas Index shot up by 2.4 percent and the NYSE Arca Oil Index advanced by 1.6 percent.
Banking stocks also saw considerable strength on the day, with the KBW Bank Index skyrocketing by 2.4 percent to a two-month closing high.
Networking, brokerage, biotechnology, and healthcare stocks also moved notably higher amid broad based buying interest on Wall Street.
Adedapo Adesanya