Dipo Olowookere
By Investors Hub
The major U.S. index futures are pointing to a lower opening on Tuesday following the long holiday weekend. Traders may look to cash in on recent gains, which lifted both the Nasdaq and the S&P 500 to record closing highs last week.
After trending higher for several sessions, stocks showed a lack of direction throughout the trading day on Friday. Despite the choppy trading, the Nasdaq and the S&P 500 ended the day at new record closing highs.
The major averages finished the day on opposite sides of the unchanged line. The Dow edged down 2.67 points or less than a tenth of a percent to 21,080.28, while the Nasdaq inched up 4.94 points or 0.1 percent to 6,210.19 and the S&P 500 crept up 0.75 points or less than a tenth of a percent to 2,415.82.
Even with the roughly flat close on the day, the major averages moved sharply higher of the week. The Nasdaq surged up by 2.1 percent, while the Dow and the S&P 500 jumped by 1.3 percent and 1.4 percent, respectively.
The lackluster performance on Wall Street came as traders expressed some uncertainty about the near-term outlook for the markets following recent volatility.
While the sell-off seen last Wednesday dragged the major averages down to their lowest levels in nearly a month, the recent winning streak lifted the Nasdaq and the S&P 500 to record highs.
Some traders were also already away from their desks, looking to get a head start on the long Memorial Day weekend.
Traders largely shrugged off the latest economic data, including a report from the Commerce Department showing that the U.S. economy grew by much more than initially estimated in the first three months of the year.
The Commerce Department said gross domestic product climbed by 1.2 percent in the first quarter compared to the previously reported 0.7 percent increase.
Economists had been expecting a more modest upward revision to the pace of GDP growth to approximately 0.9 percent.
ING Senior Economist James Knightley noted the upwardly revised first quarter GDP growth is still poor relative to the majority of other developed markets.
A separate Commerce Department report showed that new orders for manufactured durable goods pulled back by less than expected in the month of April.
The report said durable goods orders slid by 0.7 percent in April after jumping by an upwardly revised 2.3 percent in March. Economists had expected orders to slump by 1.4 percent.
Excluding a drop in orders for transportation equipment, durable goods orders still fell by 0.4 percent in April after climbing by 0.8 percent in March. Ex-transportation orders were expected to rise by 0.4 percent.
Meanwhile, the University of Michigan released revised data showing that consumer sentiment in May was virtually unchanged from the previous month.
Most of the major sectors ended the day only modest moves on the day, contributing to the lackluster performance by the broader markets.
Biotechnology stocks saw considerable weakness, however, with the NYSE Arca Biotechnology Index sliding by 1.1 percent. BioCryst Pharmaceuticals (BCRX) pulled back sharply after spiking higher in the previous session on positive trial results.
Trucking and telecom stocks also moved to the downside, while some strength was visible among railroad and electronic storage stocks.
