Stocks May See Further Upside In Early Trading - U.S. Commentary

(RTTNews) - After ending the previous session mostly higher, stocks may see some 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 35 points.

Traders may be reluctant to make significant moves ahead of the Federal Reserve's monetary policy announcement this afternoon.

The Fed is widely expected to raise rates by a quarter point, although traders will pay close attention to the accompanying statement for clues about the outlook for rates.

On the U.S. economic front, the Commerce Department released a report this morning showing an unexpected drop in retail sales in the month of May.

The Commerce Department said retail sales fell by 0.3 percent in May after climbing by an upwardly revised 0.4 percent in April.

The drop in sales surprised economists, who had expected sales to inch up by 0.1 percent compared to the 0.3 percent increase originally reported for the previous month.

Excluding auto sales, retail sales still fell by 0.3 percent in May following the 0.4 percent growth seen in April. Ex-auto sales were expected to rise by 0.2 percent.

A separate report from the Labor Department showed a modest decrease in consumer prices in May amid a steep drop in energy prices.

The report said the consumer price index edged down by 0.1 percent in May after rising by 0.2 percent in April. Economists had expected prices to come in unchanged.

Excluding food and energy prices, core consumer prices inched up by 0.1 percent in May, matching the uptick seen in the previous month. Core prices had been expected to rise by 0.2 percent.

Stocks moved to the upside early in the session and remained firmly positive throughout the trading day on Tuesday. With the upward move, the Dow and the S&P 500 both climbed to new record closing highs.

The Dow climbed 92.80 points or 0.4 percent to 21,328.47, the Nasdaq advanced 44.90 points or 0.7 percent to 6,220.37 and the S&P 500 rose 10.96 points or 0.5 percent to 2,440.35.

In overseas trading, stock markets across the Asia-Pacific region turned in another mixed performance during trading on Wednesday. Japan's Nikkei 225 Index edged down by 0.1 percent, while Hong Kong's Hang Seng Index inched up by 0.1 percent.

Meanwhile, the major European markets have all moved to the upside on the day. While the German DAX Index has jumped by 1 percent, the U.K.'s FTSE 100 Index and the French CAC 40 Index are both up by 0.5 percent.

In commodities trading, crude oil futures are falling $0.29 to $46.17 a barrel after rising $0.38 to $46.46 a barrel on Tuesday. Gold futures, which slipped $0.30 to $1,268.60 an ounce in the previous session, are climbing $6 to $1,274.60 an ounce.

On the currency front, the U.S. dollar is trading at 109.48 yen compared to the 110.07 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is valued at $1.1265 compared to yesterday's $1.1211.