By Investors Hub
The major U.S. index futures are pointing to a higher opening on Wednesday, with stocks likely to regain ground following the steep drop seen over the course of the two previous sessions.
Bargain hunting may contribute to initial strength on Wall Street as traders look to pick up stocks at reduced levels following the sell-off seen early this week.
Upbeat earnings news from companies like Foot Locker (FL), BJ?s Wholesale (BJ), and Autodesk (ADSK) may also contribute to the rebound.
Buying interest may be somewhat subdued, however, as the Commerce Department recently released a report showing a much steeper than expected drop in durable goods orders in October.
Traders may also look to get a head start on the Thanksgiving Day holiday on Thursday, leading to below average trading activity.
Following the sell-off seen on Monday, stocks showed another significant move to the downside during trading on Tuesday. With the continued drop, the tech-heavy Nasdaq fell to its lowest closing level in over seven months.
The major averages ended the session off their worst levels of the day but still sharply lower. The Dow plunged 551.80 points or 2.2 percent to 24,465.64, the Nasdaq tumbled 119.65 points or 1.7 percent to 6,908.82 and the S&P 500 slumped 48.84 points or 1.8 percent to 2,641.89.
The continued weakness on Wall Street partly reflected a negative reaction to the latest batch of earnings news from companies such as Target (TGT).
Shares of Target plummeted by 10.5 percent after the retail giant reported third quarter earnings that missed analyst estimates on slightly weaker than expected comparable store sales growth.
Department store operator Kohl’s (KSS) and Victoria’s Secret parent L Brands (LB) also posted steep losses after reporting their quarterly results.
A continued decline by Apple (AAPL) also weighed on the markets, with the tech giant tumbling by 4.8 percent to a six-month closing low.
On the U.S. economic front, a report from the Commerce Department showed housing starts rebounded in the month of October, although the report also showed a decrease in building permits.
The Commerce Department said housing starts jumped by 1.5 percent to an annual rate of 1.228 million in October after plunging by 5.5 percent to a revised rate of 1.210 million in September.
Economists had expected housing starts to climb to a rate of 1.225 million from the 1.201 million originally reported for the previous month.
Meanwhile, the report said building permits fell by 0.6 percent to an annual rate of 1.263 million in October after surging up by 1.7 percent to an upwardly revised 1.270 million in September.
Building permits, an indicator of future housing demand, had been expected to increase to 1.267 million from the 1.241 million originally reported for the previous month.
Energy stocks showed a substantial move to the downside on the day amid a steep drop by the price of crude oil.
Reflecting the weakness in the energy sector, the Philadelphia Oil Service Index plummeted by 5.7 percent, while the NYSE Arca Natural Gas Index and the NYSE Arca Oil Index plunged by 3.9 percent and 3.3 percent, respectively.
Considerable weakness was also visible among steel stocks, as reflected by the 3.9 percent nosedive by the NYSE Arca Steel Index. The steep drop reflected concerns about the outlook for global demand.
Transportation, retail, telecom and financial stocks also saw significant weakness, reflecting another broad based sell-off on Wall Street.
Adedapo Adesanya