U.S. Stocks May Give Back Ground In Early Trading

U.S. Stocks May Give Back Ground In Early Trading

October 2, 2021

After moving sharply higher over the two previous sessions, stocks may give back ground in early trading on Friday. The major index futures are currently pointing to a lower open for the markets, with the Dow futures down by 160 points.

Traders may look to cash in on the rally seen on Wednesday and Thursday, which helped offset the sell-off seen on Monday.

Uncertainty about the outlook for markets may contribute to the profit taking, as the Federal Reserve prepares to begin scaling back its asset purchases as soon as November.

China’s crackdown on bitcoin may also weigh on the markets, with the People’s Bank of China saying all cyptocurrency-related activities are illegal.

Traders are also expressing uncertainty about the situation with China Evergrande, as the indebted property company has not provided clarification about a key interest payment.

Among individual stocks, athletic apparel and footwear giant Nike (NKE) may come under pressure after reporting fiscal first quarter earnings that beat estimates but lowering its revenue guidance due to supply chain issues.

Shortly after the start of trading, the Commerce Department is scheduled to release its report on new home sales in the month of August at. Economists expect new home sales to drop 1.1 percent to an annual rate of 700,000 in August from a rate of 708,000 in July.

Stocks moved sharply higher during trading on Thursday, adding to the strong gains posted in on Wednesday. With the continued advance, the major averages more than offset the sell-off seen on Monday, turning positive for the week.

The major average pulled back off their best levels in late-day trading but remained firmly positive. The Dow soared 506.50 points or 1.5 percent to 34,764.82, the Nasdaq jumped 155.40 points or 1 percent to 15,052.24 and the S&P 500 surged up 53.34 points or 1.2 percent to 4,448.98.

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Friday. Japan’s Nikkei 225 Index spiked by 2.1 percent, while China’s Shanghai Composite Index slid by 0.8 percent.

Meanwhile, the major European markets have all moved to the downside on the day. While the French CAC 40 Index has slumped by 1.1 percent, the German DAX Index is down by 0.8 percent and the U.K.’s FTSE 100 Index is down by 0.4 percent.

In commodities trading, crude oil futures are edging down $0.12 to $73.18 a barrel after jumping $1.07 to $73.30 a barrel on Thursday. Meanwhile, after tumbling $29 to $1,749.80 an ounce in the previous session, gold futures are slipping $2.20 to $1,747.60 an ounce.

On the currency front, the U.S. dollar is trading at 110.54 yen versus the 110.33 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.1709 compared to yesterday’s $1.1739.

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