Stocks May Move Back To The Downside In Early Trading - U.S. Commentary

(RTTNews) - After turning higher over the course of the previous sessions, stocks may move back to the 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 17 points.

Profit taking may contribute to some early weakness on Wall Street following the recent strength shown by the markets.

The modest gains posted on Tuesday lifted the S&P 500 to a new record closing high, while the Nasdaq reached its best levels since early 2000.

Another disappointing report on the U.S. housing market may also weigh on the markets, as the Commerce Department reported a bigger than expected drop in housing starts in the month of January.

The report said housing starts tumbled 2.0 percent to an annual rate of 1.065 million in January after jumping 7.1 percent to the revised December estimate of 1.087 million.

Economists had expected housing starts to fall by 1.7 percent to a rate of 1.070 million in January from the 1.089 million originally reported for the previous month.

A separate report from the Labor Department showed that producer prices fell by much more than expected in January amid another substantial decrease in energy prices.

The Labor Department said its producer prices index for final demand slumped by 0.8 percent in January after edging down by 0.2 percent in each of the two previous months. The index had been expected to drop by 0.4 percent.

Excluding food and energy prices, the core producer price index dipped by 0.1 percent in January after rising by 0.3 percent in December. Core prices had been expected to inch up by 0.1 percent.

Nonetheless, overall trading activity may be somewhat subdued, as traders continue to keep a close eye on the Greek debt negotiations.

Reports indicating the new Greek government plans to apply for an extension to its current loan agreement contributed to the rebound seen in the previous session.

After recovering from an early move to the downside, stocks showed a lack of direction throughout much of the trading day on Tuesday before closing modestly higher. The slim gains on the day lifted the S&P 500 to another new record closing high.

The major averages all ended the day slightly above the unchanged line. The Dow edged up 28.26 points or 0.2 percent to 18,047.58, the Nasdaq inched up 5.43 points or 0.1 percent to 4,899.27 and the S&P 500 ticked up 3.35 points or 0.2 percent to 2,100.34.