Stocks May Move Modestly Lower In Early Trading - U.S. Commentary

(RTTNews) - While trading activity may be somewhat subdued, stocks are likely to move to the downside at the start of trading on Monday. The major index futures are currently pointing to a slightly lower open for the markets, with the Dow futures down by 8 points.

The downward momentum for the markets is partly due to concerns about the outlook for the global economy following the release of disappointing data from China.

The Chinese National Bureau of Statistics reported weaker than expected retail sales growth in August, while a separate report showed that Chinese industrial output also rose by less than expected.

Uncertainty ahead of the Federal Reserve's monetary policy announcement on Wednesday may also weigh on the markets.

The Fed is widely expected to announce a further reduction in the pace of its asset purchases, although traders are likely to pay closer attention to any suggestions regarding the outlook for interest rates.

Recent upbeat economic data has led to some concerns that the Fed may signal that it plans to begin raising rates sooner than previously anticipated.

On the U.S. economic front, the New York Federal Reserve recently released a report showing that business activity in the New York manufacturing sector has expanded at a robust pace in September.

The New York Fed said its headline general business conditions index surged up to 27.5 in September from 14.7 in August, with a positive reading indicating an increase in activity in the New York manufacturing sector. Economists had expected the index to edge up to 16.0.

With the much bigger than expected increase, the general business conditions index reached its highest level since hitting 32.6 in October of 2009.

Shortly before the start of trading, the Federal Reserve is scheduled to release a separate report on industrial production in the month of August. Economists expect production to increase by 0.3 percent.

After ending the previous session nearly flat, stocks moved mostly lower over the course of the trading day on Friday. Uncertainty about the outlook for monetary policy weighed on the markets.

The major averages climbed off their worst levels going into the close but remained stuck in the red. The Dow fell 61.49 points or 0.4 percent to 16,987.51, the Nasdaq dropped 24.21 points or 0.5 percent to 4,567.60 and the S&P 500 slid 11.91 points or 0.6 percent to 1,985.54.

With the losses on the day, the major averages all moved lower for the week. The Nasdaq edged down by 0.3 percent, while the Dow and the S&P 500 fell by 0.9 percent and 1.1 percent, respectively.

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower on Monday, although the Japanese markets were closed for a holiday. Hong Kong's Hang Seng Index and Australia's All Ordinaries Index both dropped by 1 percent.

Meanwhile, the major European markets are turning in a mixed performance on the day. The German DAX Index has edged up by 0.2 percent, while the French CAC 40 Index is down by 0.2 percent and the U.K.'s FTSE 100 Index is just below the unchanged line.

In commodities trading, crude oil futures are sliding $0.92 to $91.35 a barrel after falling $1.02 or 1.1 percent to $92.27 a barrel in the week ended September 12th. Gold futures, which tumbled $35.80 or 2.8 percent to $1,231.50 an ounce last week, are climbing $2.30 to $1,233.80 an ounce.

On the currency front, the U.S. dollar advanced against the yen last week, rising 2.1 percent to 107.34 yen. Meanwhile, the greenback edged down 0.1 percent against the euro to $1.2963. The dollar is currently trading at 107.25 yen and is valued at $1.2916 versus the euro.