After ending the previous session firmly negative, stocks may see some further downside in early trading on Wednesday. The major index futures are currently pointing to a modestly lower open for the markets, with the Dow futures down by 5 points.
Concerns about the economic outlook amid a surge in new coronavirus cases may continue to weigh on Wall Street following yesterday’s disappointing retail sales data.
Potentially adding to the economic worries, the Commerce Department released a report this morning showing a sharp pullback in new residential construction in the U.S. in the month of July.
The Commerce Department said housing starts plunged by 7.0 percent to an annual rate of 1.534 million in July after jumping by 3.5 percent to a revised rate of 1.650 million in June.
Economists had expected housing starts to slump by 2.6 percent to a rate of 1.600 million from the 1.643 million originally reported for the previous month.
However, traders have largely been able to shrug off concerns about the economy in recent sessions, with the Dow and the S&P 500 setting new record highs earlier this week.
Optimism the Federal Reserve will continue to prop up the markets with its asset purchase program has helped to offset any worries about the economy.
The minutes of the Fed’s latest monetary policy meeting, due to be released this afternoon, may subsequently attract increased attention.
Following the release of disappointing retail sales data, stocks saw significant weakness during trading on Tuesday. With the notable drop on the day, the Dow and the S&P 500 pulled back off Monday’s record closing highs.
The major averages climbed off their worst levels in afternoon trading but remained firmly negative. The Dow slumped 282.12 points or 0.8 percent to 35,343.28, the Nasdaq tumbled 137.58 points or 0.9 percent to 14,656.18 and the S&P 500 slid 31.63 points or 0.7 percent to 4,448.08.
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Wednesday. Japan’s Nikkei 225 Index climbed by 0.6 percent, while China’s Shanghai Composite Index jumped by 1.1 percent.
Meanwhile, the major European markets have moved to the downside on the day. While the German DAX Index is just below the unchanged line, the U.K.’s FTSE 100 Index is down by 0.4 percent and the French CAC 40 Index is down by 0.6 percent.
In commodities trading, crude oil futures are climbing $0.55 to $67.14 a barrel after falling $0.70 to $66.59 a barrel on Tuesday. Meanwhile, an ounce of gold is trading at $1,790.90, up $3.10 compared to the previous session’s close of $1,787.80. On Tuesday, gold edged down $2.
On the currency front, the U.S. dollar is trading at 109.81 yen compared to the 109.60 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is trading at $1.1714 compared to yesterday’s $1.1710.
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