Stocks May Attempt Another Rebound In Early Trading - U.S. Commentary

(RTTNews) - Stocks were unable to sustain the initial upward move seen in the previous session but appear poised to stage another early rally on Wednesday. The major index futures are currently pointing to a sharply higher open for the markets, with the Dow futures up by 346 points.

Traders may once again look to pick up stocks at reduced levels following the downturn seen over the course of the trading day on Tuesday.

The pullback on the day extended the recent sell-off on Wall Street, with the Dow falling to its lowest levels since February of last year, while the Nasdaq and the S&P 500 set new ten-month lows.

In addition to bargain hunting, the markets may also benefit from a report from the Commerce Department showing that durable goods orders unexpectedly increased in July.

The report said durable goods orders climbed by 2.0 percent in July after jumping by an upwardly revised 4.1 percent in June. The continued increase surprised economists, who had expected orders to drop by 0.4 percent.

Excluding a sharp increase in orders for transportation equipment, durable goods orders rose by a more modest 0.6 percent in July following a 1.0 percent increase in June.

Additionally, early buying interest may be generated by news China's central bank injected 140 billion yuan into the financial system through its short-term liquidity operations facility.

The move comes after the Peoples' Bank of China lowered interest rates for the fifth time in nine months as part of an ongoing effort to boost growth.

After moving sharply higher at the start of trading on Tuesday, stocks erased the early gains over the course of the session before closing notably lower.

The major averages ended the session near their worst levels of the day. The Dow tumbled 204.91 points or 1.3 percent to 15,666.44, the Nasdaq fell 19.76 points or 0.4 percent to 4,506.49 and the S&P 500 slid 25.59 points or 1.4 percent to 1,867.62.

In overseas trading, stock markets across the Asia-Pacific region turned in another mixed performance during trading on Wednesday. Japan's Nikkei 225 Index surged up by 3.2 percent, while Hong Kong's Hang Seng Index slumped by 1.5 percent.

Meanwhile, the major European markets have all moved modestly higher on the day. The U.K.'s FTSE 100 Index, the French CAC 40 Index and the German DAX Index have all edged up by 0.1 percent.

In commodities trading, crude oil futures are climbing $0.40 to $41.04 a barrel after rebounding by $1.07 to $39.31 a barrel on Tuesday. Meanwhile, an ounce of gold is currently trading at $1,125.40, down $12.90 from the previous session's close of $1,138.30. On Tuesday, gold fell $15.30.

On the currency front, the U.S. dollar is trading at 119.77 yen compared to the 118.83 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is valued at $1.1372 compared to yesterday's $1.1517.