Recent Upward Momentum May Persist on Wall Street

By Investors Hub

The major U.S. index futures are pointing to a higher opening on Tuesday, with stocks likely to extend the upward move seen over the previous session.

The markets may continue to benefit from recent upward momentum, which has lifted the major averages to their best levels in two months.

Optimism about U.S.-China trade talks has contributed to recent buying interest along with indications the prolonged government shutdown did not have a significant impact on the U.S. economy.

Traders are also reacting to fourth quarter results from Google parent Alphabet (GOOGL), which exceeded analyst estimates on both the top and bottom lines.

However, shares of Alphabet are moving lower in pre-market trading amid concerns about a sharp increase in capital spending by the tech giant as well as a drop in advertising prices.

After turning in a lackluster performance early in the session, stocks moved mostly higher over the course of the trading day on Monday. With the upward move, the major averages reached their best closing levels in two months.

The major averages saw further upside going into the close, reaching new highs for the session. The Dow climbed 175.48 points or 1.7 percent to 25,239.37, the Nasdaq jumped 83.67 points or 1.2 percent to 7,347.54 and the S&P 500 advanced 18.34 points or 0.7 percent to 2,724.87.

Technology stocks helped to lead the way higher on Wall Street, contributing to the significant gain posted by the tech-heavy Nasdaq.

The markets continued to benefit from recent upward momentum as well as the positive sentiment generated by last Friday’s monthly employment report showing much stronger than expected job growth in the month of January.

Trading activity was somewhat subdued, however, as traders expressed uncertainty about the near-term outlook for the markets on the heels of the upward trend seen in recent weeks.

Uncertainty about trade talks between the U.S. and China also kept some traders on the sidelines along with the potential for another government shutdown amid an ongoing impasse over President Donald Trump’s border wall.

The economic calendar for the week is also relatively light, although traders are likely to keep an eye on reports on service sector activity, international trade, and labor productivity and costs.

While the Commerce Department released a report showing an unexpected drop in factory orders in the month of November, the delayed data was likely seen as old news.

Software stocks moved sharply higher over the course of the trading session, driving the Dow Jones Software Index up by 2.3 percent to its best closing level in two months.

Ultimate Software (ULTI) posted a standout gain after the human resources software maker agreed to be acquired by an investor group led by private equity firm Hellman & Friedman for $331.50 per share or approximately $11 billion in cash.

Significant strength also emerged among computer hardware stocks, with the NYSE Arca Computer Hardware Index climbing by 1.6 percent to a two-month closing high.

Tobacco, oil service, and retail stocks also saw notable strength on the day, while some weakness was visible among housing stocks.

Modupe Gbadeyanka is a fast-rising journalist with Business Post Nigeria. Her passion for journalism is amazing. She is willing to learn more with a view to becoming one of the best pen-pushers in Nigeria. Her role models are the duo of CNN's Richard Quest and Christiane Amanpour.

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