Stocks May See Early Strength In Reaction To Earnings News - U.S. Commentary

(RTTNews) - After ending last Friday's trading sharply higher, stocks are likely to see some further upside in early trading on Tuesday. The major index futures are currently pointing to a higher open for the markets, with the Dow futures up by 77 points.

A positive reaction to earnings news from companies such as Halliburton (HAL) and Delta Air Lines (DAL) may contribute to early strength on Wall Street

Shares of Halliburton are up by 2.5 percent in pre-market trading after the oil service giant reported fourth quarter adjusted earnings that exceeded analyst estimates.

Baker Hughes (BHI), which has agreed to be acquired by Halliburton for approximately $35 billion, also reported better than expected fourth quarter results.

Shares of Delta are also likely to move to the upside in early trading after the airline beat fourth quarter earnings estimates amid a benefit from falling fuel prices.

On the other hand, Morgan Stanley (MS) could see early weakness after the financial giant joined its rivals and reported fourth quarter earnings that came in below analyst estimates.

IBM (IBM), Advanced Micro Devices (AMD), and Netflix (NFLX) may also be in focus ahead of the release of their quarterly results after the close of trading.

Not long after the open, trading could be impacted by the release of a report from the National Association of Home Builders on homebuilder confidence in the month of January.

Economists expect the NAHB/Wells Fargo Housing Market Index to edge back up to 58 in January after dipping to 57 in December.

Nonetheless, trading activity may be somewhat subdued as traders look ahead to the outcome of the European Central Bank's monetary policy meeting on Thursday.

Many analysts expect the ECB to expand its quantitative easing program, particularly after last week's surprise move by the Swiss National Bank.

Traders may also be somewhat reluctant to make any significant moves ahead of President Barack Obama's State of the Union address this evening.

After initially showing a lack of direction, stocks moved sharply higher over the course of the trading day on Friday. The gains on the day came on the heels of a recent pullback, with the major averages snapping a five-session losing streak.

The major averages saw further upside going into the close, ending the session near their best levels of the day. The Dow surged up 190.86 points or 1.1 percent to 17,511.57, the Nasdaq soared 63.56 points or 1.4 percent to 4,634.38 and the S&P 500 jumped 26.75 points or 1.3 percent to 2,019.42.

Despite the strong gains on the day, the major averages all moved lower for the week. The Nasdaq tumbled by 1.5 percent, while the Dow and the S&P 500 slid by 1.3 percent and 1.2 percent, respectively.

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Tuesday. Japan's Nikkei 225 Index surged up by 2.1 percent, while Hong Kong's Hang Seng Index advanced by 0.9 percent.

The major European markets have also moved to the upside on the day. While the French CAC 40 Index has jumped by 1.4 percent, the U.K.'s FTSE 100 Index is up by 0.8 percent and the German DAX Index is up by 0.3 percent.

In commodities trading, crude oil futures are tumbling $1.45 to $47.24 a barrel after rallying $2.44 to $48.69 a barrel last Friday. Meanwhile, gold futures are climbing $9.30 to $1,286.20 an ounce. Last Friday, gold gained $12.10 to $1,276.90 an ounce.

On the currency front, the U.S. dollar is trading at 118.55 yen compared to the 117.56 yen it fetched at the close of trading on Monday. Against the euro, the dollar is trading at $1.1602 compared to yesterday's $1.1606.