Bargain Hunting May Contribute To Rebound On Wall Street - U.S. Commentary

(RTTNews) - Stocks are likely to move to the upside in early trading on Wednesday, regaining ground following the sell-off seen in recent sessions. The major index futures are currently pointing to a higher open for the markets, with the Dow futures up by 156 points.

Bargain hunting is likely to contribute to initial strength on Wall Street, with traders picking up stocks at reduced levels on the heels of recent weakness.

The continued sell-off seen in a holiday-shortened session on Monday dragged the major averages down to their lowest closing levels in well over a year.

Trading activity is likely to remain somewhat subdued, however, as many traders remain away from their desks after the Christmas Day holiday on Tuesday.

A lack of major U.S. economic data may also keep traders on the sidelines, although reports on new home sales, consumer confidence, and pending home sales may attract attention in the coming weeks.

Meanwhile, the ongoing government shutdown may limit any recovery attempt by the markets, with lawmakers not expected to reconvene until Thursday.

President Donald Trump has stated the government will not reopen until Democrats agree to fund his controversial border wall.

Stocks showed another substantial move to the downside in a holiday-shortened session on Monday, extending the sell-off seen over the past several sessions. With the steep drop on the day, the major averages once again tumbled to their lowest closing levels in well over a year.

The major averages saw further downside going into the close, ending the session at their worst levels of the day. The Dow plummeted 653.17 points or 2.9 percent to 21,792.20, the Nasdaq tumbled 140.08 points or 2.2 percent to 6,192.92 and the S&P 500 plunged 65.52 points or 2.7 percent to 2,351.10.

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower on Wednesday, although Japan's Nikkei 225 Index bucked the downtrend and advanced by 0.8 percent. Many markets in region were closed on the day.

Meanwhile, the major European markets also remain closed on the day as a result of the Boxing Day holiday.

In commodities trading, crude oil futures are rising $0.35 to $42.88 barrel after plunging $3.06 to $42.53 a barrel on Monday. Meanwhile, after jumping $13.70 to $1,271.80 ounce in the previous session, gold futures are climbing $6 to $1,227.80 an ounce.

On the currency front, the U.S. dollar is trading at 110.57 yen compared to the 110.31 it fetched on Tuesday. Against the euro, the dollar is valued at $1.1388 compared to yesterday's $1.1392.