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

(RTTNews) - The major U.S. index futures are currently pointing to a modestly higher open on Wednesday, with stocks likely to move back to the upside after ending the previous session mostly lower.

Traders may look to pick up stocks at reduced levels following the weakness on Tuesday, which dragged the Nasdaq down to its lowest closing level in well over a month.

Overall trading activity is likely to be relatively subdued, however, as many traders remain away from their desks amid the holidays.

Following the long Christmas weekend, the markets are set for another break this weekend due to New Year's Day.

With trading resuming following the long Christmas weekend, stocks moved mostly lower during trading on Tuesday. The tech-heavy Nasdaq showed a particularly steep drop, tumbling to its lowest closing level in well over a month.

The Nasdaq plunged 144.64 points or 1.4 percent to 10,353.23 and the S&P 500 fell 15.57 points or 0.4 percent to 3,829.25. Meanwhile, the narrower Dow inched up 37.63 points or 0.1 percent to 33,241.56.

The weakness on Wall Street partly reflected lingering concerns about the economic outlook following recent indications the Federal Reserve plans to continuing raising interest rates.

Trading activity was relatively subdued, however, as some traders remained away from their desks following the long Christmas weekend.

A light economic calendar also kept traders on the sidelines, although reports on pending home sales, weekly jobless claims and Chicago-area business activity may attract attention in the coming days.

Airline stocks moved sharply lower on the day, with the NYSE Arca Airline Index plunging by 2.3 percent amid continued flight cancellations due to the severe winter storm.

Southwest Airlines (LUV) posted a steep loss following news the Department of Transportation is investigating the company's "unacceptable rate of cancellations."

Biotechnology and semiconductor stocks also saw significant weakness, contributing to the sharp drop by the tech-heavy Nasdaq.

Reflecting the weakness in the sectors, the NYSE Arca Biotechnology Index and the Philadelphia Semiconductor Index slid by 1.9 percent and 1.8 percent, respectively.

On the other hand, gold stocks moved sharply higher on the day, driving the NYSE Arca Gold Bugs Index up by 2.5 percent.

The rally by gold stocks came amid a notable increase by the price of the precious metal, with gold for February delivery climbing $18.90 to $1,823.10 an ounce.

Commodity, Currency Markets

Crude oil futures are slipping $0.32 to $79.21 a barrel after edging down $0.03 to $79.53 a barrel on Tuesday. Meanwhile, an ounce of gold is trading at $1,813.50, down $9.60 compared to the previous session's close of $1,823.10. On Tuesday, gold advanced $18.90.

On the currency front, the U.S. dollar is trading at 133.81 yen compared to the 133.49 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is trading at $1.0638 compared to yesterday's $1.0640.

Asia

Asian stocks fell broadly on Wednesday as Treasury yields rose on Fed policy uncertainty and data showed Japan's industrial output fell for the third month in a row in November, suggesting the economy is still very fragile.

Investors expressed hopes of a recovery in demand after China moved to remove some of its most stringent travel restriction measures.

China's Shanghai Composite index slipped 0.3 percent to 3,087.40, snapping a two-day winning streak.

Hong Kong's Hang Seng Index rallied 1.6 percent to 19,898.91 as traders returned to their desks after a long holiday weekend.

The Chinese government announced it will start issuing new passports in another major step that could send an influx of free-spending Chinese tourists to revenue-starved destinations in Asia and Europe for next month's Lunar New Year holiday.

Japanese markets ended lower as higher U.S. Treasury yields pressured chip-related shares. Investors also digested data showing that the country's industrial output fell 0.1 percent month-on-month in November, declining for the third straight month due to weak overseas and domestic demand.

The Nikkei 225 Index slid 0.4 percent to 26,340.50, while the broader Topix finished marginally lower at 1,909.02.

The yen eased against the dollar after a summary of opinions at the BOJ December meeting showed board members discussed growing prospects that higher wages could finally eradicate the risk of a return to deflation.

Seoul stocks tumbled as heavyweight chipmakers and battery manufacturers turned ex-dividend. The Kospi plunged 2.2 percent to 2,280.45.

Australian stocks posted modest losses in post-holiday trading. The benchmark S&P/ASX 200 Index dropped 0.3 percent to 7,086.40, dragged down by financials and technology stocks.

The broader All Ordinaries Index ended 0.4 percent lower at 7,262.20. Energy and mining stocks outperformed on China reopening optimism.

Genex Power shares slumped 18.8 percent after a consortium walked away from a takeover bid for the electricity generation firm.

Europe

Most European stocks are turning in a lackluster performance, although U.K. stocks have surged as trading resumes following a long weekend.

After China announced the re-opening of borders in a major shift of its epidemic response policies, several countries have announced safety measures like testing and medical scrutiny of passengers coming from China and other countries where the virus is prevalent.

While the German DAX Index and the French CAC 40 Index are nearly unchanged, the U.K.'s FTSE 100 Index is up by 0.8 percent.

Higher copper prices have boosted miners, with Anglo American, Antofagasta and Glencore posting notable gains percent in London.

Oil and gas firms BP Plc and Shell have also jumped as oil prices remain supported by news that Russia aims to ban oil sales from February 1 to countries that abide by a G7 price cap imposed on December 5.

China-exposed luxury firms such as LVMH and Kering are seeing modest gains in Paris on hopes of a demand revival in China.

U.S. Economic Reports

The National Association of Realtors is scheduled to release its report on pending home sales in the month of November at 10 am ET. Pending home sales are expected to rise by 0.6 percent in November after plunging by 4.6 percent in October.

A pending home sale is one in which a contract was signed but not yet closed. Normally, it takes four to six weeks to close a contracted sale.

At 1 pm ET, the Treasury Department is scheduled to announce the results of this month's auction of $43 billion worth of five-year notes.