Modupe Gbadeyanka
By Investors Hub
The major U.S. index futures are pointing to a modestly lower opening on Wednesday following the lacklustre performance seen over the two previous sessions.
Political uncertainty may weigh on the markets on the heels of President Donald Trump’s abrupt dismissal of FBI Director James Comey.
In a letter to Comey, Trump said it is essential to find new leadership that restores public trust and confidence in the FBI’s vital law enforcement mission.
A statement from the White House said Trump acted based on the clear recommendations of both Deputy Attorney General Rod Rosenstein and Attorney General Jeff Sessions.
The move has generate some criticism, however, as it comes as Comey was leading an investigation of potential ties between Russia and Trump’s presidential campaign.
Nonetheless, traders may stick to the sidelines ahead of the release of key reports on retail sales and producer and consumer prices in the coming days.
After seeing modest strength early in the session, stocks turned mixed over the course of the trading day on Tuesday. While the Dow and the S&P 500 pulled back into negative territory, the tech-heavy Nasdaq reached a new record closing high.
The Nasdaq rose 17.93 points or 0.3 percent to 6,120.59, but the Dow dipped 36.50 points or 0.2 percent to 20,975.78 and the S&P 500 edged down 2.46 points or 0.1 percent to 2,396.92.
The mixed close on Wall Street came as traders seemed reluctant to make significant moves ahead of the release of key reports on retail sales and producer and consumer prices later this week.
Early in the session, some buying interest was generated in reaction to upbeat earnings news, with Marriott (MAR) and Office Depot (ODP) moving notably higher after reporting better than expected quarterly earnings.
Traders also kept an eye on comments from Federal Reserve officials, with Boston Fed President Eric Rosengren suggesting the central bank could be forced to raise interest rates at a faster pace if unemployment drops below 4 percent.
“Such an overheated economy would likely be accompanied by higher inflation, which in turn would likely elicit higher interest rates,” Rosengren said.
On the U.S. economic front, the Commerce Department released a report showing an unexpected increase in wholesale inventories in the month of March.
The report said wholesale inventories rose by 0.2 percent in March after climbing by 0.3 percent in February. Inventories had been expected to edge down by 0.1 percent.
Most of the major sectors ended the day showing only modest moves, contributing to the lackluster close by the broader markets.
Energy stocks saw considerable weakness, however, with a drop by the price of crude oil weighing on the sector. Reflecting the weakness in the energy sector, the NYSE Arca Natural Gas Index and the Philadelphia Oil Service Index dropped by 1.3 percent and 1 percent, respectively.
On the other hand, biotechnology stocks showed a strong move to the upside, driving the NYSE Arca Biotechnology Index up by 1.3 percent.
Within the biotech sector, Endo International (ENDP) posted a standout gain after reporting better than expected first quarter earnings.
Semiconductor and networking stocks also saw some strength on the day, contributing to the higher close by the tech-heavy Nasdaq.
