After ending yesterday’s choppy trading session mostly higher, stocks may see further upside in early trading on Wednesday. The major index futures are currently pointing to a higher open for the markets, with the Dow futures up by 215 points.
The markets may benefit from optimism that lawmakers will eventually reach an agreement on a new coronavirus relief bill.
Democratic leaders said they continue to make progress toward an agreement after meeting with Trump administration officials on Tuesday.
“We’re making progress,” said Senate Minority Leader Chuck Schumer, D-N.Y. “We really went down issue by issue by issue, slogging through them,”
“They made some concessions, which we appreciated. We made some concessions, which they appreciated,” he added. “We’re still far away on a lot of the important issues, but we’re continuing to go at it.”
The comments from Schumer come after Senate Majority Leader Mitch McConnell, R-Ken., indicated he would support any agreement between Democrats and the White House.
Positive sentiment may also be generated in reaction to upbeat earnings news from Disney (DIS), with the entertainment giant spiking by 6.5 percent in pre-market trading.
After the close of trading on Tuesday, Disney reported an unexpected adjusted fiscal third quarter profit despite weaker than expected revenues.
However, early buying interest may be partly offset by a report from payroll processor ADP showing a substantial slowdown in private sector job growth in the month of July.
ADP said private sector employment rose by 167,000 jobs in July after soaring by an upwardly revised 4.314 million jobs in June.
Economists had expected employment to surge up by another 1.5 million jobs compared to the 2.369 million job spike originally reported for the previous month.
A separate report from the Commerce Department showed the U.S. trade deficit narrowed in the month of June amid a spike in the value of exports.
The Commerce Department said the trade deficit narrowed to $50.7 billion in June from a revised $54.8 billion in May.
Economists had expected the trade deficit to narrow to $50.1 billion from the $54.6 billion originally reported for the previous month.
Not long after the start of trading, the Institute for Supply Management is scheduled to release its report on activity in the service sector in the month of July.
The ISM’s non-manufacturing index is expected to dip to 55.0 in July after spiking to 57.1 in June, although a reading above 50 would still indicate growth.
Stocks showed a lack of direction for much of the trading session on Tuesday but managed to end the day mostly higher. The major averages benefited from a late move to the upside after spending the day bouncing back and forth across the unchanged line.
The Dow closed higher for the third straight session, climbing 164.07 points or 0.6 percent to 26,828.47. The Nasdaq rose 38.37 points or 0.4 percent to a new record closing high of 10,941.17 and the S&P 500 advanced 11.90 to 0.4 percent to 3,306.51, its best closing level in over five months.
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Wednesday. Japan’s Nikkei 225 Index fell by 0.3 percent, while China’s Shanghai Composite Index edged up by 0.2 percent.
Meanwhile, the major European markets have all moved to the upside on the day. While the U.K.’s FTSE 100 Index has jumped by 1 percent, the French CAC 40 Index is up by 0.8 percent and the German DAX Index is up by 0.5 percent.
In commodities trading, crude oil futures are spiking $1.47 to $43.17 a barrel after climbing $0.69 to $41.70 a barrel on Tuesday. Meanwhile, an ounce of gold is trading at $2,050.40, up $29.40 compared to the previous session’s recording closing high of $2,021. On Tuesday, gold skyrocketed $34.70.
On the currency front, the U.S. dollar is trading at 105.63 yen compared to the 105.54 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is trading at $1.1872 compared to yesterday’s $1.1803.
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