Stocks May See Early Weakness Ahead Of Fed Minutes - U.S. Commentary

(RTTNews) - Following the pullback seen in the previous session, stocks are likely to see some further downside in early trading on Wednesday. The major index futures are currently pointing to a lower open for the markets, with the Dow futures down by 81 points.

The downward momentum for the markets partly reflects trepidation ahead of the release of the minutes of the Federal Reserve's latest monetary policy meeting this afternoon.

The minutes are likely to be closely analyzed for hints regarding whether the Fed will begin raising interest rates at its next meeting in September. However, it is worth noting that the minutes contain a slew of information that could be used by those on either side of the interest rate debate to support their argument.

Traders are also reacting to a report from the Labor Department showing that U.S. consumer prices rose by slightly less than expected in July.

The Labor Department said its consumer price index edged up by 0.1 percent in July after climbing by 0.3 percent in June. Economists had expected prices to rise by 0.2 percent.

Excluding food and energy prices, the core consumer price index also ticked up by 0.1 percent in July following a 0.2 percent increase in June. Core prices were also expected to rise by 0.2 percent.

Among individual stocks, shares of Staples (SPLS) are likely to come under pressure in early trading after the office supplies retailer reported second quarter earnings that met analyst estimates but provided disappointing guidance.

Home improvement retailer Lowe's (LOW) may also see early weakness after reporting weaker than expected second quarter earnings.

On the other hand, shares of Analog Devices (ADI) are likely to see early strength after the chip maker reported third quarter results that beat expectations and provided upbeat guidance.

Data storage systems maker Dot Hill (HILL) is spiking sharply higher in pre-market trading after agreeing to be acquired by Seagate Technology (STX) for $9.75 per share or a total of $694 million.

Stocks moved mostly lower over the course of the trading day on Tuesday, partly offsetting the upward move seen on Monday. Selling pressure was relatively subdued, however, limiting the downside for the markets.

The major averages finished the session in the red but off their worst levels of the day. The Dow edged down 33.84 points or 0.2 percent to 17,511.34, the Nasdaq slid 32.35 points or 0.6 percent to 5,059.35 and the S&P 500 dipped 5.52 points or 0.3 percent to 2,096.92.

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Wednesday. Japan's Nikkei 225 Index tumbled by 1.6 percent, while China's Shanghai Composite Index jumped by 1.2 percent.

Meanwhile, the major European markets have all come under pressure on the day. While the German DAX Index has slumped by 1.4 percent, the U.K.'s FTSE 100 Index and the French CAC 40 Index are both down by 1 percent.

In commodities trading, crude oil futures are slipping $0.21 to $42.41 a barrel after rebounding by $0.75 to $42.62 a barrel on Tuesday. Meanwhile, an ounce of gold is currently trading at $1,119.30, up $2.40 from the previous session's close of $1,116.90. On Tuesday, gold fell $1.50.

On the currency front, the U.S. dollar is trading at 124.32 yen compared to the 124.41 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is valued at $1.1028 compared to yesterday's $1.1024.