Stocks May Move Back To The Upside In Early Trading - U.S. Commentary

(RTTNews) - After starting off the New Year on a largely negative note, stocks may move back to the upside in early trading on Monday. The major index futures are pointing to a higher open for the markets, with the Dow futures up by 32 points.

Whiles some traders may go bargain hunting following the pullback seen last week, any early buying interest is likely to be relatively subdued.

Most traders are likely to be reluctant to make any significant moves ahead of the release of reports on factory orders and service sector activity. Both reports are due to be released at 10 am ET.

Factory orders are expected to rebound by 1.6 percent in November after falling by 0.8 percent in October, while the index of activity in the service sector is expected to climb to 54.8 in December from 53.9 in November.

The upcoming release of the closely watched monthly jobs report on Friday is also likely to keep traders on the sidelines in the coming days.

Meanwhile, some negative sentiment may be generated by the release of a report showing a slowdown in the pace of growth in Chinese service sector activity.

Revised estimates released by Markit Economics and HSBC showed that their index of activity in the service sector fell to 50.9 in December from 52.5 in November.

While a reading above 50 indicates growth, the drop pulled the service sector index down to its lowest level since August of 2011.

Following the sharp pullback seen last Thursday, stocks fluctuated over the course of the trading day on Friday before closing mixed.

While the Dow posted a modest gain on the day, the Nasdaq and the S&P 500 closed in the red. The Dow crept up 28.64 points or 0.2 percent to 16,469.99, while the Nasdaq fell 11.16 points or 0.3 percent to 4,131.91, and the S&P 500 edged down 0.61 points or less than a tenth of a percent to 1,831.37.

The major averages all moved lower for the week due largely to the weakness seen on Thursday. The Dow dipped by 0.1 percent, and the Nasdaq and the S&P 500 dropped by 0.6 percent and 0.5 percent, respectively.

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Monday. Japan's Nikkei 225 Index tumbled by 2.4 percent, while Hong Kong's Hang Seng Index ended the day down by 0.6 percent.

Meanwhile, the major European markets have turned mixed on the day. While the French CAC 40 Index has edged down by 0.1 percent, the U.K.'s FTSE 100 Index and the German DAX Index are up by 0.2 percent and 0.3 percent, respectively.

In commodities trading, crude oil futures are climbing $0.38 to $94.34 a barrel after plunging $6.36 or 6.3 percent to $93.96 a barrel in the week ended January 3rd. Gold futures, which climbed $24.60 or 2 percent to $1,238.60 an ounce last week, are rising $1.50 to $1,240.10 an ounce.

On the currency front, the U.S. dollar saw some weakness last week. The greenback fell 0.5 percent against the yen to 104.87 yen and dropped 1.2 percent against the euro before ending at $1.3589. The dollar is currently trading at 104.60 yen and is valued at $1.3600 versus the euro.