The major U.S. index futures are pointing to a mixed opening on Tuesday, with sentiment reflecting uneasiness among traders ahead of the Federal Open Market Committee meeting. An economic report released earlier in the day confirmed the strong holiday sales trend and offers some comfort amid the sea of uncertainty. That said, traders may not indulge into strong buying, given the apprehension ahead of what the central bank has to say concerning the economy and its recently initiated QE II program.
U.S. stocks managed to hold above the unchanged line for much of the session on Monday, encouraged by the positive global lead, before caution over the overbought levels led to some selling. Consequently, the major averages closed on a mixed note.
The major averages opened higher, with the Dow Industrials and the S&P 500 Index climbing steadily after some consolidation was seen in early trading. After hitting their intra-day highs in late trading, the averages pulled back to relinquish much of their gains. At the close of trading, the Dow Industrials was up 18.24 points or 0.16% at 11,429 and the S&P 500 Index was up merely 0.06 points at 1,241.
However, the Nasdaq Composite, which outperformed the other two averages for much of the previous week, moved sideways with a modest gain till late trading before pulling back sharply. The index ended down 12.63 points or 0.48% at 2,625.
The breadth among the Dow components was even. Caterpillar (CAT), Chevron (CVX), Disney (DIS) and Merck (MRK) were among the notable gainers. On the other hand, Bank of America (BAC) slid 2.03%, Hewlett-Packard (HPQ) declined 2.09% and Intel (INTC) lost 1.87%.
While the NYSE Arca Gold Bugs Index gained 1.04% and the Philadelphia Oil Service Index added 1.27%, the NYSE Arca Internet Index slid 1.02%.
Currency, Commodity Markets
Crude oil futures are moving down $0.25 to $88.36 a barrel after moving up $0.82 to $88.61 a barrel on Monday. An ounce of gold is currently trading at $1,400.70, up $5.60. In the previous session, gold futures ended up $13.10 at $1,398.
Among currencies, the U.S. dollar is trading at 83.29 yen compared to the 83.3905 yen it fetched at the close of New York trading on Monday. The euro is firmer at $1.3431 compared to yesterday’s New York session close of $1.3390.
Asia
Most Asian markets closed Tuesday's session higher, although the gains were accomplished amid volatility and uncertainty. Commodity prices extended their gains, helping commodity-related stocks.
Economic reports released from the region were mostly negative. New Zealand retail sales slumped at the fastest pace in more than 13 years in October as the rise in the goods and services tax at the start of the month dampened retail activity.
Meanwhile, the Australian Bureau of Statistics said housing starts plunged 13.2% sequentially in the September quarter to approximately 40,000, overturning a 2.1% increase in the June quarter. The quarterly drop in housing commencements represents the first since a 1.4% drop in the June quarter of 2009. Analysts were expecting a 5% decline.
The revised industrial production report released by the Japanese Ministry of Economy, Trade and Industry showed a revised 2% decline in output for October compared to the 1.8% drop estimated earlier. In seasonally adjusted terms, capacity utilization rose 2.3% in October. On a year-over-year basis, output increased by 4.3%.
Japan's Nikkei 225 average opened lower and spent the better part of the morning below the unchanged line. Although stocks recovered by the mid-session, the Nikkei retreated again in late afternoon trading before staging a late-hour recovery. The index closed up 22.88 points or 0.22% at 10,317.
In Japan, technology stocks traded on a mixed note, while pharma, resource, utility, real estate and most financial stocks advanced.
Australia's All Ordinaries remained above the unchanged line throughout the session amid some volatility to close up 9.70 points or 0.20% at 4,851. Material and energy stocks showed some buoyancy, while defensive utilities came under selling pressure.
Hong Kong's Hang Seng Index also hovered in positive territory throughout the session before closing up 113.58 points or 0.49% at 23,431. Financial stocks advanced, while some property and resource stocks came under selling pressure.
Europe
The major European markets are showing a lack of direction on Tuesday and are seen trading on a mixed note. The French CAC 40 Index and the U.K.’s FTSE 100 Index are up 0.02% and 0.21%, respectively, while the German DAX Index is moving down 0.15%.
On the economic front, the British house price balance continued to stay in negative territory in November, although it improved a tad from the previous month’s multi-month low. The survey conducted by the Royal Institution of Chartered Surveyors showed that respondents reporting declines in house prices outweighed those reporting increases by 44% in November. Economists were forecasting the balance to dip to minus 50% in November.
The French statistical agency INSEE reported that French annual consumer price inflation remained unchanged at 1.6% in November. The rate was tamer than the 1.7% expected by economists. On a monthly basis, consumer prices edged up 0.1%.
The results of a private survey among investors and analysts showed that German economic confidence improved for a second straight month in December. The economic sentiment index came in at 4.3 following a reading of 1.8 in November. Nevertheless, the index came in below the historical average of 26.8.
Meanwhile, Eurostat reported that the euro area’s industrial production rose 0.7% month-over-month in October, completely reversing the 0.7% drop in the previous month. However, the increase was not as optimistic as the 1.3% growth expected by economists. On an annual basis, industrial output climbed 6.9%, faster than the 5.4% growth in September and the 5.2% increase expected by economists.
British annual inflation rose further in November on higher food prices, an official report showed. The annual inflation rate for November was 3.3%, the highest since May and up from a 3.2% rate in October, the Office for National Statistics said. Economists had expected inflation to stay unchanged at 3.2%.
