Stocks May Extend Last Week's Strong Performance - U.S. Commentary

(RTTNews) - After turning in a strong performance last week, stocks could see some further upside in early trading on Monday. The major index futures are currently pointing to a higher open for the markets, with the Dow futures up by 69 points.

Stocks may continue to benefit from a positive reaction to last Friday's monthly jobs report, which showed stronger than expected job growth in the month of July.

The increased optimism about the economic outlook seemed to overshadow concerns that the data may lead the Federal Reserve to begin scaling back its stimulus program.

Nonetheless, trading activity may be somewhat subdued, as some traders are likely to remain away from their desks following last week's Independence Day holiday.

Uncertainty about the upcoming earnings season may also keep some traders on the sidelines, with Alcoa (AA) scheduled to release its second quarter results after the close of trading.

The release of quarterly results from Alcoa is seen as the unofficial start of earnings season, as the aluminum giant is traditionally the first Dow component to report its results.

Peter Boockvar of Morgan Stanley said, "With Q2 corporate earnings about to begin, S&P 500 earnings are expected to be up just 1.8% year-over-year and down by 1% ex financials."

"Revenue growth is expected to be up a modest 1.3% and 1.2% ex financials, which follows revenue growth in Q1 of just 0.6% and 0.3% ex financials," he added.

Stocks moved mostly higher over the course of the trading day on Friday after fluctuating earlier in the session. The markets benefited from a positive reaction to the Labor Department's closely watched monthly employment report.

The major averages saw further upside going into the close, ending the session at their best levels of the day. The Dow jumped 147.29 points or 1 percent to 15,135.84, the Nasdaq climbed 35.71 points or 1 percent to 3,479.38 and the S&P 500 rose 16.48 points or 1 percent to 1,631.89.

With the strong gains on the day, the major averages all moved higher for the holiday-interrupted week. The Nasdaq surged up by 2.2 percent, while the Dow and the S&P 500 advanced by 1.5 percent and 1.6 percent, respectively.

In overseas trading, stock markets across the Asia-Pacific region came under pressure during trading on Monday. Japan's Nikkei 225 Index fell by 1.4 percent, while Hong Kong's Hang Seng Index ended the day down by 1.3 percent.

Meanwhile, the major European markets have shown notable moves to the upside on the day. While the U.K.'s FTSE 100 Index is up by 1.3 percent, the French CAC 40 Index is up by 2 percent and the German DAX Index is up by 2.5 percent.

In commodities trading, crude oil futures are sliding $0.77 to $102.45 a barrel after surging up $6.81 or 7.1 percent to $103.22 a barrel in the week ended July 5th. Meanwhile, gold futures, which fell $11 or 0.9 percent to $1,212.70 an ounce last week, are climbing $22.70 to $1,235.40 an ounce.

On the currency front, the U.S. dollar rose across the board last week, advancing 2.1 percent against the yen to 101.20 yen and climbing 1.4 percent against the euro before ending the week at $1.2829. The greenback is currently trading at 101.11 yen and is valued at $1.2850 versus the euro.