After ending the previous session sharply lower, stocks are likely to move back to the upside in early trading on Wednesday. The major index futures are currently pointing to a higher open for the markets, with the Dow futures up by 103 points.
Bargain hunting may contribute to initial strength on Wall Street, as traders pick up stocks at reduced levels following the sell-off seen on Tuesday.
The sharp downward move seen in the previous session dragged the Dow and the S&P 500 to their lowest closing levels in a month, while the tech-heavy Nasdaq hit a three-month closing low.
Early buying interest may also be generated in reaction to upbeat earnings news from several big-name companies.
Financial giants Bank of America (BAC) and Morgan Stanley (MS) are seeing notable pre-market strength after reporting better than expected fourth quarter earnings.
Shares of Procter & Gamble (PG) are also likely to move to the upside after the consumer products giant reported fourth quarter results that exceeded estimates and provided upbeat guidance.
In U.S. economic news, new residential construction in the U.S. unexpectedly saw a notable increase in the month of December, according to a report released by the Commerce Department on Wednesday.
The report said housing starts jumped 1.4 percent to an annual rate of 1.702 million in December from a revised rate of 1.678 million in November.
Economists had expected housing starts to drop to a rate of 1.650 million from the 1.679 million originally reported for the previous month.
The Commerce Department also said building permits spiked by 9.1 percent to an annual rate of 1.873 million from a revised rate of 1.717 million in November.
Building permits, an indicator of future housing demand, were expected to drop to a rate of 1.701 million from the 1.712 million originally reported for the previous month.
Following the mixed performance seen last Friday, stocks showed a notable move to the downside during trading on Tuesday. With the downward move, the Dow and the S&P 500 dropped to their lowest closing levels in a month, while the tech-heavy Nasdaq hit a three-month closing low.
The major averages all finished the day firmly in negative territory. The Dow slumped 543.34 points or 1.5 percent to 35,368.47, the Nasdaq plunged 386.86 points or 2.6 percent to 14,506.90 and the S&P 500 tumbled 85.74 points or 1.8 percent to 4,577.11.
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Wednesday. Japan’s Nikkei 225 Index plummeted by 2.8 percent, while China’s Shanghai Composite Index fell by 0.3 percent.
Meanwhile, the major European markets have moved to the upside on the day. While the French CAC 40 Index has advanced by 0.9 percent, the German DAX Index and the U.K.’s FTSE 100 Index are both up by 0.6 percent.
In commodities trading, crude oil futures are rising $0.55 to $85.98 a barrel after jumping $1.61 to $85.43 a barrel a barrel on Tuesday. Meanwhile, an ounce of gold is trading at $1,824.80, up $12.40 compared to the previous session’s close of $1,812.40. On Tuesday, gold dipped $4.10.
On the currency front, the U.S. dollar is trading at 114.48 yen compared to the 114.61 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is trading at $1.1346 compared to yesterday’s $1.1325.
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