U.S. Stocks May Stage Another Rebound Attempt In Early Trading
Stocks seem poised to attempt another rebound on Wednesday after pulling back sharply from an initial move to the upside in the previous session. The major index futures are currently pointing to a higher open for the markets, with the Dow futures up by 86 points.
Traders may once again look to go bargain hunting following the failed attempt on Tuesday, which saw stocks experience another sell-off following an early uptick.
Yesterday’s steep drop saw the Dow slump to its lowest closing level in nearly four months, while the Nasdaq and the S&P 500 tumbled to their lowest closing levels in nearly two months and three months, respectively.
The markets seemed due for a correction after continually climbing to new record highs in recent months, but some traders may feel the sell-off in reaction to the coronavirus outbreak has been overdone.
Nonetheless, lingering concerns about the outbreak escalating into a pandemic that substantially slows global economic growth may keep buying interest somewhat subdued.
The Trump administration has sought to downplay concerns about the coronavirus, with President Donald Trump accusing the media of exaggerating the situation in order to panic the markets.
Trump said in a post on Twitter this morning that he will be holding a press conference on the coronavirus with CDC representatives and others at 6 pm ET.
Shortly after the start of trading, the Commerce Department is scheduled to release its report on new home sales in the month of January.
Economists expect new home sales to jump by 2.3 percent to an annual rate of 710,000 in January after slipping by 0.4 percent to a rate of 694,000 in December.
Following the sell-off seen on Monday, stocks showed another substantial move to the downside during trading on Tuesday. With the continued decline, the Dow tumbled to its lowest closing level in nearly four months.
The major averages all finished the day sharply lower. The Dow plunged 879.44 points or 3.2 percent to 27,081.36, the Nasdaq plummeted 255.67 points or 2.8 percent to 8,965.61 and the S&P 500 slumped 97.68 points or 3 percent to 3,128.21.
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Wednesday. Japan’s Nikkei 225 Index and China’s Shanghai Composite Index both slid by 0.8 percent, while Australia’s S&P/ASX 200 Index tumbled by 2.3 percent.
Meanwhile, the major European markets have turned mixed after coming under pressure earlier in the day. While the U.K.’s FTSE 100 Index is down by 0.2 percent, the German DAX Index is just above the unchanged line and the French CAC 40 Index is up by 0.2 percent.
In commodities trading, crude oil futures are sliding $0.55 to $49.33 a barrel after tumbling $1.53 to $49.90 a barrel on Tuesday. Meanwhile, an ounce of gold is trading at $1,639.60, down $10.40 compared to the previous session’s close of $1,650. On Tuesday, gold plunged $26.60.
On the currency front, the U.S. dollar is trading at 110.48 yen compared to the 110.20 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is trading at $1.0860 compared to yesterday’s $1.0882.
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