Following the long holiday weekend, stocks are likely to move to the upside in early trading on Tuesday. The major index futures are currently pointing to a higher open for the markets, with the Dow futures up by 257 points.
The major averages are poised to add to last week’s strong gains amid economic optimism following strong overseas data on manufacturing activity.
Data showed Chinese manufacturing activity expanded at a faster pace in the month of May, while Eurozone manufacturing activity expanded at a record pace in May despite supple bottlenecks.
Not long after the start of trading, the Institute for Supply Management is scheduled to release its report on manufacturing activity in the U.S. in the month of May.
Economists expect the ISM’s manufacturing PMI to come in unchanged at 60.7, with a reading above 50 indicating growth in the manufacturing sector.
The Commerce Department is also due to release its report on construction spending in the month of April. Construction spending is expected to increase by 0.6 percent.
Nonetheless, overall trading activity may be somewhat subdued ahead of the release of the Labor Department’s closely watched monthly employment report on Friday.
Economists currently expect employment to jump by 664,000 jobs in May after climbing by 266,000 jobs in April. The unemployment rate is also expected to dip to 5.9 percent from 6.1 percent.
U.S. stocks closed higher on Friday amid rising optimism about the economic recovery thanks to upbeat economic data and prospects of additional fiscal stimulus. However, gains were just modest for all the major averages today, as buying interest remained somewhat subdued.
The Dow closed up by 64.81 points or 0.2 percent at 34,529.45, down more than 100 points from the day’s high. The Nasdaq settled with a gain of 12.46 points or 0.1 percent at 13,748.74. The S&P 500 ended up by 3.23 points or 0.1 percent at 4,204.11.
For the week, the Dow gained about 0.9 percent, while the Nasdaq and the S&P 500 added 2.1 percent and 1.2 percent, respectively.
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Tuesday. Japan’s Nikkei 225 Index dipped by 0.2 percent, while China’s Shanghai Composite Index rose by 0.3 percent.
Meanwhile, the major European markets have all shown strong moves to the upside on the day. While the German DAX Index has surged up by 1.6 percent, the U.K.’s FTSE 100 Index and the French CAC 40 Index are up by 1.2 percent and 1.1 percent, respectively.
In commodities trading, crude oil futures are spiking $2.16 to $68.48 a barrel after falling $0.53 to $66.32 a barrel last Friday. Meanwhile, after climbing $6.80 to $1,905.30 an ounce in the previous session, gold futures are rising $6.40 to $1,911.70 an ounce.
On the currency front, the U.S. dollar is trading at 109.64 yen compared to the 109.58 yen it fetched on Monday. Against the euro, the dollar is valued at $1.2222 compared to yesterday’s $1.2227.
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