Markets On Track For Rebound As Bargain Hunting Sets In

(RTTNews) - The major U.S. index futures are pointing to a higher opening on Tuesday, with sentiment suggesting that bargain hunting may generate strength. The dollar is mixed, although the euro has trimmed its losses against the dollar, as reports of Greece considering an offer from Eurogroup came about. The domestic markets may also focus on two separate reports on Chicago region manufacturing activity and consumer confidence.

U.S. stocks retreated sharply on Monday, as the Greek fears proved well founded amid the nation's call for a referendum following the collapse of talks with its international creditors. The major averages opened lower and moved sideways in early trading before declining steadily throughout the session, with the averages ending at multi-month lows.

The Dow Industrials plunged 350.33 points or 1.95 percent before ending at a 5-month low of 17,596 and the S&P 500 Index ended down 43.85 points or 2.09 percent at a 3-month low of 2,058, while the Nasdaq Composite closed at 4,959, down 122.04 points or 2.40 percent.

All thirty of the Dow components closed lower, with Visa (V), Boeing (BA), American Express (AXP), Cisco Systems (CSCO), DuPont (DD), Goldman Sachs (GS) and JP Morgan Chase (JPM) leading the declines.

The selling pressure was broad based, with most sectors showing notable losses. Airline, brokerage, and semiconductor stocks turned in some of the worst performances.

On the economic front, the National Association of Realtors reported that pending home sales rose 0.9 percent month-over-month in May, ahead of the 0.6 percent growth expected by economists. April's reading was downwardly revised to show 2.7 percent growth from 3.4 percent. Pending home sales rose in the West and Northeast, while pending sales fell in the Southwest and Midwest.

The Dallas Federal Reserve's manufacturing index improved more than expected to -7 in June from -20.8 in May.

Currency, Commodity Markets

Crude oil futures are climbing $0.17 to $58.50 a barrel after tumbling $1.30 to $58.33 a barrel on Monday.  Meanwhile, an ounce of gold is currently trading at $1,171.80, down $7.20 from the previous session's close of $1,179.  On Monday, gold rose $5.80     On the currency front, the U.S. dollar is trading at 122.44 yen compared to the 122.54 yen it fetched at the close of New York trading on Monday. Against the euro, the dollar is valued at $1.1197 compared to yesterday's $1.1236. 

Asia

The major Asian averages rebounded following yesterday's sell-off, helped by bargain hunting. Chinese stocks rose sharply, with the Shanghai Composite Index surging up over 5 percent.

The Japanese market advanced despite the yen's strength in the wake of the Greek debt crisis. The Nikkei 225 Index moved about in a broad range, although it remained mostly above the unchanged line before ending up 125.78 points or 0.63 percent at 20,236.

A majority of stocks advanced, with export stocks seeing mixed sentiment. Financial and energy stocks came under selling pressure.

After moving about in a nervous manner for much of the session, Australia's All Ordinaries Index moved decisively higher in late trading before ending up 34.60 points or 0.64 percent at 5,451.

The market witnessed broad based strength, with energy, industrial, healthcare and consumer discretionary stocks gaining solid ground. At the same time, IT and utility stocks moved to the downside.

China's Shanghai Composite Index rallied 224.19 points or 5.53 percent before ending at 4,277 and Hong Kong's Hang Seng Index closed at 26,250, up 283.05 points or 1.09 percent.

On the economic front, a report released by the Housing Industry Association showed that new home sales in Australia fell 2.3 percent month-over-month in May following a 0.6 percent increase in April.

A separate Reserve Bank of Australia report showed that private sector credit in Australia rose 0.5 percent month-over-month in May, below the 0.6 percent increase expected by economists.

The Japanese Ministry of Land, Infrastructure, Transport and Tourism reported that housing starts in Japan climbed 5.8 percent year-over-year in May following a 0.4 percent increase in April. Economists expected a more modest 5.5 percent growth.

Japanese construction orders received by the 50 big contractors declined 7.4 percent year-over-year in May following a 12.1 percent drop in April.

Total labor cash earnings in Japan increased 0.6 percent in May, although the rate of growth eased from the previous month, a preliminary report from the Ministry of Health, Labor and Welfare showed.

Europe

European stocks opened lower and saw further downside in the morning trading, as Greece remained an overhang. Thousands of Greeks rallied in Athens yesterday to back their government's rejection of a tough bailout dictated by its creditors after the Greek government closed banks and imposed capital controls due to its failure to clinch a deal with its creditors. However, with reports emerging that Greek Prime Minister Alexis Tsipras is considering the latest aid proposal made by European Commissioner President Jean-Claude Juncker, the averages have trimmed their losses.

On the economic front, the final first quarter GDP report released by the U.K. Office for National Statistics showed an upward revision to the sequential growth to 0.4 percent. The year-over-year growth was also revised up to 2.9 percent from 2.4 percent.

The results of a survey by the GfK showed that confidence among the U.K. consumers rose to 7 in June from 1 in May, with the improvement coming about due to the decisive results shown by parliamentary elections.

The German Federal Statistics Bureau reported that retail sales in Germany unexpectedly rose by 0.5 percent month-over-month in May, advancing for the second straight month. Economists expected an unchanged reading.

A separate report from Destatis showed that the unemployment rate for Germany remained at 4.7 percent in May, unchanged from the previous month.

The number of unemployed individuals declined less than expected in June, data from the Federal Labor Agency reportedly revealed.  The number of people out of work fell by 1,000 in June from the previous month, while it was forecast to drop by 5,000. The jobless rate remained unchanged at 6.4 percent in June, in line with expectations. 

Flash inflation data released by Eurostat showed that core annual inflation eased to 0.8 percent in June from 0.9 percent in May. A separate report showed that the jobless rate in the eurozone was unchanged at 11.1 percent in May, in line with estimates.

U.S. Economic Reports

At 9 am ET, S&P/Case-Shiller is due to release their house price index for April. Economists expect a 0.8 percent month-over-month increase in the 20-city composite house price index following a 1 percent increase in the previous month. The annual growth is expected to quicken to an unadjusted 5.4 percent from 5 percent.

The Conference Board is scheduled to release its consumer confidence index for June at 10 am ET. The consensus estimate calls for an increase in the index to 97.4.

The consumer confidence index rose to 95.4 in May from 94.3 in April, while economists had expected a reading of 95.1. The present situation index rose to 108.1 from 105.1, but the expectations index edged down to 86.9 from 87.1.

MNI Indicators is due to release the results of its Chicago area business survey around the same time. Economists expect the business barometer to increase to 50.6 in June, with a reading above 50 indicating growth.

In May, the business barometer index fell to 46.2, down from 52.3 in April and the consensus estimate of 51. The indexes of new orders, production and employment all saw steep declines and were in contraction territory.

Stocks in Focus

Cisco (CSCO) said it intends to acquire OpenDNS, a privately held security company based in San Francisco, for $635 million in cash and assumed equity awards, plus retention based incentives for OpenDNS. 

 Manny, Moe & Jack (PBY) announced that its Board of Directors has commenced a review of strategic alternatives to enhance shareholder value, including a possible sale. 

 Allscripts (MDRX) and NantHealth, a cloud-based information technology company, announced they have taken a significant step forward in their strategic partnership through two cross-investments and a strengthening of their commercial agreement. The investments include Allscripts' purchase of a 10% equity stake in NantHealth for $200 million in cash.

Blackstone (BX) announced a deal to sell security service provider AlliedBarton to Wendel for $1.67 billion.

Microsoft (MSFT) and AOL announced a partnership agreement under which AOL will assume the management and sales responsibility of Microsoft's display, mobile and video advertising inventory in 9 key global markets.

Apollo Education (APOL) reported better than expected third quarter adjusted earnings but its revenues were shy of estimates. The company lowered its revenue guidance for 2015 below the consensus estimate.

CLARCOR (CLC) said it has sold off its J.L. Clark packaging subsidiary to Henry Crown and Co. for $77 million.