Traders Cautious Ahead Of Open - U.S. Commentary

(RTTNews) - Stocks look poised for a lackluster start to Tuesday's action, as traders get back to work after a three-day holiday weekend.

The mood on Wall Street has turned more cautious after the gains of the previous two weeks. Indications had suggested a lower start early in the morning. The picture has improved slightly as the open draws near, but traders clearly want to be convinced that the markets have further upside after the recent gains.

On Friday, the recent upward momentum continued, closing out a week that saw the Nasdaq gain 2.9 percent and the Dow and S&P 500 both climb 2.3 percent.

In economic news, a key regional manufacturing survey suggested that growth for New York State manufacturers slowed last month.

The New York Fed's Empire State index fell to 4.48 for February, compared to a reading of 12.51 for January. Economists had expected a reading of 8.5.

Any reading above zero indicates expansion in the sector. January's decline suggests that manufacturing in New York State continued to expand during the month, but at a slower pace.

Later in the morning, the National Association of Home Builders is set to announce its housing market index for February. The report provides a look at confidence levels in the home building sector, an indication of the health of the housing sector as a whole.

In corporate news, Forest Laboratories (FRX) has agreed to be acquired by Specialty pharmaceutical company Actavis (ACT). The deal is valued at $25 billion. The purchase will be made with a combination of cash and equity that values Forest at $89.48 a share.

Waste services provider Waste Management (WM) reported a net loss for the fourth quarter, compared to a profit in the same period last year. Hefty charges weighed on the bottom line. Still, even without these one-time items, the company's adjusted result missed expectations. Waste Management also gave a cautious forecast for 2014.

Turning to overseas trading, the European markets are currently mixed. There are mild gains in the U.K. and losses in France. Germany is sitting near the unchanged mark.

Germany's investor confidence weakened more than expected in February.

Asian stocks held steady on Tuesday, although Chinese shares fell from two-month highs on liquidity worries.

Japan's Nikkei average jumped 3.1 percent on the session. The Bank of Japan kept its monetary easing plan unchanged, but doubled a funding tool to 7 trillion yen to stimulate bank lending. The revision allows financial institutions to borrow funds from the central bank up to an amount that is twice as much as the net increase in their lending.