Stocks May Extend Yesterday's Pullback Ahead Of Fed Minutes - U.S. Commentary

(RTTNews) - Following the sharp pullback seen in the previous session, stocks could see some further downside in early trading on Wednesday. The major index futures are currently pointing to a lower open for the markets, with the Dow futures down by 63 points.

Concerns about the outlook for interest rates may continue to weigh on the markets following yesterday's batch of U.S. economic data.

Upbeat housing and industrial production data as well as a report showing a bigger than expected increase in consumer prices led to speculation the Federal Reserve may raise rates next month.

While no major economic data is scheduled to be release this morning, the Fed is scheduled to release the minutes of its April monetary policy meeting this afternoon.

The minutes may provide some insight into the thinking of Fed officials and whether the central bank plans a rate hike at its June meeting.

Ahead of the release of the Fed minutes, trading could be impacted by reaction to the Energy Information Administration's weekly report on oil inventories, which could drive the price of oil.

Among individual stocks, shares of Target (TGT) are under pressure in pre-market trading after the retailer reported better than expected first quarter earnings but on disappointing same-store sales.

Office supplies retailer Staples (SPLS) could also come under pressure after reporting first quarter earnings that beat estimates as well as a bigger than expected drop in North American same-store sales.

Meanwhile, home improvement retailer Lowe's (LOW) may be in focus after reporting better than expected first quarter results.

Shares of Cisco (CSCO) could also attract increased attention, as the networking giant is due to release its fiscal third quarter results after the close of today's trading.

Stocks moved sharply lower over the course of the trading day on Tuesday, offsetting the rally that was seen on Monday. With the pullback on the day, the Dow fell to its lowest closing level in well over a month and the Nasdaq hit a two-month closing low.

The major averages climbed off their worst levels going into the close but remained firmly in the red. The Dow slumped 180.73 points or 1 percent to 17,529.98, the Nasdaq plunged 59.73 points or 1.3 percent to 4,715.73 and the S&P 500 tumbled 19.45 points or 0.9 percent to 2,047.21.

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower on Wednesday. Japan's Nikkei 225 Index edged down by 0.1 percent, while China's Shanghai Composite Index and Hong Kong's Hang Seng Index slumped by 1.3 percent and 1.5 percent, respectively.

The major European markets have also moved to the downside on the day. While the U.K.'s FTSE 100 Index has fallen by 0.6 percent, the French CAC 40 Index is down by 0.4 percent and the German DAX Index is down by 0.2 percent.

In commodities trading, crude oil futures are slipping $0.06 to $48.25 a barrel after advancing $0.59 to $48.31 a barrel on Tuesday. Meanwhile, an ounce of gold is currently trading at $1,272.20, down $4.70 from the previous session's close of $1,276.90. On Tuesday, gold rose $2.70. On the currency front, the U.S. dollar is trading at 109.40 yen compared to the 109.14 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is valued at $1.1273 compared to yesterday's $1.1313.