Stocks May Continue To Give Back Ground In Early Trading - U.S. Commentary

(RTTNews) - After moving notably lower over the course of the previous session, stocks may see some further downside in early trading on Tuesday. The major index futures are currently pointing to a lower open for the markets, with the Dow futures down by 46 points.

Uncertainty ahead of tomorrow's Federal Reserve announcement may weigh on the markets along with ongoing concerns about next week's referendum on whether Britain will remain in the European Union.

Stocks futures have seen continued weakness following the release of a Commerce Department report showing stronger than expected retail sales growth in the month of May.

The Commerce Department said retail sales climbed by 0.5 percent in May after surging up by 1.3 percent in April. Economists had expected sales to rise by 0.3 percent.

Excluding an increase in auto sales, retail sales still rose by 0.4 percent in May following a 0.8 percent increase in the previous month. The ex-auto sales growth matched economist estimates.

The Labor Department also released a report showing that import prices surged up by much more than expected in May amid another substantial increase in fuel prices.

The report said import prices jumped by 1.4 percent in May after climbing by an upwardly revised 0.7 percent in April. Economists had expected import prices to rise by 0.8 percent.

The Labor Department said export prices also shot up by 1.1 percent in May following a 0.5 percent advance in April. Export prices had been expected to edge up by 0.2 percent.

Shortly after the start of trading, a separate report from the Commerce Department is expected to show a 0.2 percent uptick in business inventories in the month of April.

Overall trading activity may be somewhat subdued, however, as traders may be reluctant to make significant moves as the two-day Fed meeting gets underway.

The Fed is widely expected to leave interest rates unchanged when it makes its monetary policy announcement on Wednesday, but traders are likely to keep a close eye on the accompanying statement.

Fed Chair Janet Yellen's subsequent press conference is also likely to be in focus amid uncertainty about the possibility of a rate hike next month.

Among individual stocks, shares of Baidu (BIDU) are likely to come under pressure after the Chinese search engine lowered its second quarter revenue guidance.

Medical device maker Zimmer Biomet (ZBH) may also moved to the downside after pricing a secondary offering of 11.1 million shares at $115.85.

On the other hand, shares of NXP Semiconductors (NXPI) may see early strength on news the company agreed to divest its Standard Products business to a consortium of investors for approximately $2.75 billion.

After initially showing a lack of direction, stocks moved mostly lower over the course of the trading session on Monday. With the drop on the day, the S&P 500 pulled back further off last Wednesday's ten-month closing high.

The major averages saw further downside going into the close, ending the session near their worst levels of the day. The Dow fell 132.86 points or 0.7 percent to 17,732.48, the Nasdaq slumped 46.11 points or 0.9 percent to 4,848.44 and the S&P 500 slid 17.01 points or 0.8 percent to 2,079.06.

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower on Tuesday. Japan's Nikkei 225 Index tumbled by 1 percent, while Hong Kong's Hang Seng Index dropped by 0.6 percent. However, China's Shanghai Composite Index bucked the downtrend and rose by 0.3 percent.

The major European markets have also moved to the downside on the day. While the French CAC 40 Index is down by 1.7 percent, the U.K.'s FTSE 100 Index is down by 1.3 percent and the German DAX Index is down by 0.8 percent.

In commodities trading, crude oil futures are falling $0.64 to $48.24 a barrel after slipping $0.19 to $48.88 a barrel in the previous session. Meanwhile, an ounce of gold is currently trading at $1,288.70, up $1.80 from the previous session's close of $1,286.90. On Monday, gold rose $11. On the currency front, the U.S. dollar is trading at 105.93 yen compared to the 106.26 yen it fetched at the close of New York trading on Monday. Against the euro, the dollar is valued at $1.1234 compared to yesterday's $1.1292.