Dipo Olowookere
By Investors Hub
The major U.S. index futures are pointing to a modestly lower opening on Tuesday, with stocks likely to add to the losses posted in the previous session.
Concerns about the outlook for interest rates may weigh on the markets ahead of the Federal Reserve?s monetary policy announcement on Wednesday.
While the Fed is widely expected to leave interest rates unchanged, traders are likely to pay close attention to the accompanying statement for clues about the outlook for rates.
Traders may also be reluctant to pick up stocks ahead of the release of the Labor Department?s closely watched monthly jobs report on Friday.
After failing to sustain an initial upward move, stocks moved mostly lower over the course of the trading session on Monday. The major averages pulled back into negative territory following the mixed performance seen last Friday.
Going into the close, the major averages saw further downside, ending the session firmly in the red. The Dow fell 148.04 points or 0.6 percent to 24,163.15, the Nasdaq slid 53.53 points or 0.8 percent to 7,066.27 and the S&P 500 slumped 21.86 points or 0.8 percent to 2,648.05.
The lower close on Wall Street came as traders looked ahead to several key events later this week, including the Federal Reserve’s monetary policy announcement on Wednesday.
On the U.S. economic front, the Commerce Department released a report showing personal income increased by slightly less than expected in the month of March.
The report said personal income rose by 0.3 percent in March, matching the downwardly revised increase in February. Economists had expected income to climb by 0.4 percent.
Meanwhile, the Commerce Department said personal spending climbed by 0.4 percent in March after coming in unchanged in the previous month. The increase in spending matched economist estimates.
A separate report from the National Association of Realtors showed pending home sales increased by less than expected in the month of March.
NAR said its pending home sales index rose by 0.4 percent to 107.6 in March from a downwardly revised 107.2 in February. Economists had expected pending home sales to climb by 0.9 percent.
A pending home sale is one in which a contract was signed but not yet closed. Normally, it takes four to six weeks to close a contracted sale.
Gold stocks showed a significant move to the downside on the day, dragging the NYSE Arca Gold Bugs Index down by 2 percent. The weakness among gold stocks came amid a decrease by the price of the precious metal.
Considerable weakness was also visible among housing stocks, as reflected by the 1.7 percent drop by the Philadelphia Housing Sector Index. With the decrease, the index ended the session at its lowest closing level in six months.
Telecom, biotechnology, and computer hardware stocks also saw notable weakness, moving lower along with most of the other major sectors.
