Dipo Olowookere
By Investors Hub
The major U.S. index futures are pointing to a roughly flat opening on Tuesday, with stocks likely to extend the lackluster performance seen in the previous session.
Traders may remain reluctant to make significant moves ahead of Federal Reserve Chairman Jerome Powell?s semiannual monetary policy testimony before the Senate Banking Committee.
Powell?s remarks are likely to be closely watched for clues about the outlook for interest rate hikes after the Fed previously signaled two more rate hikes this year.
Nonetheless, a notable decline by shares of Netflix (NFLX) may weigh on the tech-heavy Nasdaq, with the video streaming service tumbling by 12.9 percent in pre-market trading.
Following the strong upward move seen last week, stocks turned in a lackluster performance during trading on Monday. The major averages showed a lack of direction, spending the day bouncing back and forth across the unchanged line.
The major averages eventually ended the session mixed. While the Dow rose 44.95 points or 0.2 percent to 25,064.36, the Nasdaq dipped 20.26 points or 0.3 percent to 7,805.72 and the S&P 500 edged down 2.88 points or 0.1 percent to 2,798.43.
The choppy trading on Wall Street came as traders seemed reluctant to make significant moves ahead of the release of quarterly financial results from a number of big-name companies this week.
Goldman Sachs (GS), Johnson & Johnson (JNJ), Morgan Stanley (MS), American Express (AXP), IBM Corp. (IBM), Microsoft (MSFT), and General Electric (GE) are among the companies due to report their results in the coming days.
Nonetheless, traders largely refrained from cashing in on last week’s gains after a report from the Commerce Department showed retail sales in the U.S. increased in line with economist estimates in the month of June.
The report said retail sales climbed by 0.5 percent in June after soaring by an upwardly revised 1.3 percent in May. Economists had expected sales to rise by 0.5 percent compared to the 0.8 percent increase originally reported for the previous month.
Excluding a jump in auto sales, retail sales still rose by 0.4 percent in June following a 1.4 percent spike in May. The increase in ex-auto sales also matched economist estimates.
A separate report from the Federal Reserve Bank of New York showed New York manufacturing activity continued to grow at a fairly brisk pace in July, although the pace of growth slowed from the previous month.
While the New York Fed said its general business conditions index dipped to 22.6 in July from 25.0, a positive reading still indicates growth in regional manufacturing activity. Economists had expected the index to drop to 22.0.
The Commerce Department also released a report showing business inventories increased in line with economist estimates in the month of May.
Many of the major sectors showed only modest moves on the day, although considerable weakness was visible among energy stocks. The sell-off by energy stocks came amid a sharp drop by the price of crude oil.
Reflecting the weakness in the energy sector, the NYSE Arca Natural Gas Index plunged by 2 percent, while the Philadelphia Oil Service Index and the NYSE Arca Oil Index slumped by 1.7 percent and 1.5 percent, respectively.
Significant weakness is also visible among tobacco stocks, as reflected by the 2.9 percent drop by the NYSE Arca Tobacco Index.
Biotechnology and transportation stocks also moved notably lower, while Bank of America (BAC) helped lead the banking sector higher after reporting better than expected second quarter results
