Stocks May Open Lower On Disappointing Wal-Mart Earnings - U.S. Commentary

(RTTNews) - Stocks may move back to the downside in early trading on Tuesday after ending the previous session moderately higher. The major index futures are currently pointing to a lower open for the markets, with the Dow futures down by 39 points.

A negative reaction to earnings news from Wal-Mart (WMT) may contribute to early weakness on Wall Street, as the retail giant is falling by 2.5 percent in pre-market trading.

The drop by shares of Wal-Mart comes after the company reported weaker than expected second quarter earnings and lowered its full-year guidance.

Worries about the situation in China are also likely to weigh on the markets following a sell-off by stocks in the communist nation.

China's Shanghai Composite Index plunged 6.2 percent on the day amid concerns about economic growth. The steep drop came as even as the People's Bank of China set the mid-point of the dollar-yuan exchange rate slightly higher.

On the U.S. economic front, the Commerce Department recently released a report showing that housing starts edged up to a nearly eight-year high in July, although the report also showed a sharp drop in building permits.

The report said housing starts inched up by 0.2 percent to an annual rate of 1.206 million in July from the revised June estimate of 1.204 million.

With the modest increase, housing starts rose to their highest annual rate since reaching 1.264 million in October of 2007.

Meanwhile, the report said building permits, an indicator of future housing demand, plunged 16.3 percent to an annual rate of 1.119 million in July after jumping to an eight-year high of 1.337 million in June.

After coming under pressure at the start of trading, stocks showed a significant rebound over the course of the trading session on Monday. The volatility on the day came amid the release of a mixed batch of U.S. economic data.

The major averages finished the session firmly in positive territory. The Dow rose 67.78 points or 0.4 percent to 17,545.18, the Nasdaq jumped 43.46 points or 0.9 percent to 5,091.70 and the S&P 500 climbed 10.90 points or 0.5 percent to 2,102.44.

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Tuesday. Japan's Nikkei 225 Index fell by 0.3 percent, while Hong Kong's Hang Seng Index tumbled by 1.4 percent.

The major European markets have also moved to the downside on the day. While the U.K.'s FTSE 100 Index has fallen by 0.5 percent, the French CAC 40 Index and the German DAX Index are down by 0.3 percent and 0.2 percent, respectively.

In commodities trading, crude oil futures are inching up $0.02 to $41.89 a barrel after sliding $0.63 to a six-year low of $41.87 a barrel a barrel on Monday. Meanwhile, an ounce of gold is currently trading at $1,116.70, down $1.70 from the previous session's close of $1,118.40. On Monday, gold climbed $5.70.

On the currency front, the U.S. dollar is trading at 124.34 yen compared to the 124.39 yen it fetched at the close of New York trading on Monday. Against the euro, the dollar is valued at $1.1034 compared to yesterday's $1.1078.