Stocks May See Initial Weakness After Last Week's Rally - U.S. Commentary

(RTTNews) - Stocks are likely to come under pressure in early trading on Monday following the rally seen in the previous week. The major index futures are currently pointing to a lower open for the markets, with the Dow futures down by 75 points.

Profit taking may contribute to early weakness on Wall Street, as traders cash in on the strong gains posted last week.

Trading activity is likely to be relatively subdued, however, with some traders still away from their desks following the Christmas holiday.

The upcoming week will also be holiday-shortened due to the New Year's Day holiday, which will keep the markets closed on Friday.

The economic calendar for the week is relatively light, although traders are likely to keep an eye on reports on consumer confidence, pending home sales, and Chicago-area business activity.

With many traders away from their desks before Christmas, stocks showed a lack of direction throughout the abbreviated trading session on Thursday. The major averages spent the day bouncing back and forth across the unchanged line.

The major averages eventually ended the session mixed. While the Nasdaq inched up 2.56 points or 0.1 percent to 5,048.49, the Dow fell 50.44 points or 0.3 percent to 17,552.17 and the S&P 500 dipped 3.30 points or 0.2 percent to 2,060.99.

Despite the mixed performance on the day, the major averages all moved notably higher for the week. The S&P 500 jumped by 2.8 percent, while the Dow and the Nasdaq both surged up by 2.5 percent.

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Monday. Japan's Nikkei 225 Index climbed by 0.6 percent, while Hong Kong's Hang Seng Index slumped by 1 percent.

Meanwhile, the major European markets have moved to the downside on the day, with the U.K. markets closed for a holiday. The German DAX Index is down by 0.7 percent, while the French CAC 40 Index is down by 0.9 percent.

In commodities trading, crude oil futures are tumbling $1.06 to $37.04 a barrel after jumping $2.04 or 5.7 percent to $38.10 a barrel in the week ended December 24th. Gold futures, which climbed $10.90 or 1 percent to $1,075.90 an ounce last week, are receding $5.90 to $1,070 an ounce.

Among currencies, the U.S. dollar moved lower in the previous week amid profit taking. The greenback lost 0.7 percent against the yen before ending at 120.33 yen and fell 0.9 percent against the euro to $1.0960 a euro. The dollar is currently trading at 120.44 yen and is valued at $1.0964 versus the euro.