U.S. Stocks May Show A Lack Of Direction In Early Trading

After turning in a strong performance last week, stocks may show a lack of direction in early trading on Monday. The major index futures are currently pointing to a roughly flat open for the markets, with the S&P 500 futures down by less than a tenth of a percent.

Traders may be reluctant to make significant moves as they digest last week’s gains, which lifted the Dow and S&P 500 to new record highs.

The tech-heavy Nasdaq has also reached its best levels in well over two years but has encountered some resistance around its November 2021 highs.

Traders may also stick to sidelines ahead of the release of some key economic data later this week, including a closely watched inflation reading.

The Commerce Department’s report on personal income and spending, which is scheduled to be released on Thursday, includes a reading on consumer price inflation said to be preferred by the Federal Reserve.

The inflation data could have a notable impact on the outlook for interest rates, as Fed officials have said they need greater confidence inflation is slowing before cutting rates.

Reports on durable goods orders, consumer confidence, weekly jobless claims and manufacturing activity are also likely to attract attention in the coming days.

Among individual stocks, shares of Domino’s Pizza (DPZ) are moving sharply higher in pre-market trading after the restaurant chain reported better than expected fourth quarter results, increased its quarterly dividend and announced a stock buyback.

Apparel retailer Gap (GPS) may also move to the upside after JPMorgan upgraded its rating on the company’s stock to Neutral from Underweight.

On the other hand, shares of Moderna (MRNA) may come under pressure after HSBC downgraded its rating on the biotechnology company’s stock to Reduce from Hold.

Shortly after the start of trading, the Commerce Department is scheduled to release its report on new home sales in the month of January.

New home sales are expected to jump to an annual rate of 680,000 in January after surging to a rate of 664,000 in December.

Stocks extended Thursday’s substantial rally in early trading on Friday but turned in a relatively lackluster performance over the remainder of the trading session. Despite the choppy trading, the Dow and the S&P 500 reached new record closing highs.

The major averages bounced back and forth across the unchanged line before closing narrowly mixed. While the Nasdaq dipped 44.80 points or 0.3 percent to 15,996.82, the Dow rose 62.42 points or 0.2 percent to 39,131.53 and the S&P 500 inch up 1.77 points or less than a tenth of a percent to 5,088.80.

For the holiday-shortened week, the S&P 500 surged by 1.7 percent, while the Nasdaq and the Dow jumped by 1.4 percent and 1.3 percent, respectively.

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Monday. Japan’s Nikkei 225 Index rose by 0.4 percent, while China’s Shanghai Composite Index slumped by 0.9 percent.

The major European markets are also mixed on the day. While the German DAX Index is up by 0.1 percent, the U.K.’s FTSE 100 Index is down by 0.2 percent and the French CAC 40 Index is down by 0.3 percent.

In commodities trading, crude oil futures are slipping $0.13 to $76.36 a barrel after plunging $2.12 to $76.49 a barrel last Friday. Meanwhile, after jumping $18.70 to $2,049.40 an ounce in the previous session, gold futures are falling $7.50 to $2,041.90 an ounce.

On the currency front, the U.S. dollar is trading at 150.61 yen versus the 150.51 yen it fetched at the close of New York trading on Friday. Against the euro, the dollar is trading at $1.0850 compared to last Friday’s $1.0821.