WASHINGTON (dpa-AFX) - Following the rally seen over the course of the three previous sessions, stocks are likely to 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 119 points.
Continued strength on Wall Street would help the major averages further offset the sharp pullback seen last week, with the Nasdaq once again closing in on a new record high.
Traders have shrugged off the concerns about a second wave of coronavirus infections that contributed to last week's sell-off despite data showing a spike in new cases and hospitalizations in a number of southern states.
Instead, investors have focused on a recent batch of upbeat U.S. economic data, such as the substantial rebound in retail sales reported on Tuesday, which has reinforced optimism about a quick recovery.
The Trump administration has ruled out another lockdown, suggesting the economy will remain broadly open even in the face of a second wave of infections.
On the U.S. economic front, the Commerce Department released a report showing a notable rebound in new residential construction in May, although housing starts still came in well below economist estimates.
The report said housing starts jumped by 4.3 percent to an annual rate of 974,000 in May after plummeting by 26.4 percent to a revised rate of 934,000 in April.
Economists had expected housing starts to soar by 22.9 percent to a rate of 1.095 million from the 891,000 originally reported for the previous month.
Meanwhile, the Commerce Department said building permits spiked by 14.4 percent to an annual rate of 1.220 million in May after plunging by 21.4 percent to a revised rate of 1.066 million in April.
Building permits, an indicator of future housing demand, had been expected to surge up by 14.3 percent to a rate of 1.228 million from the 1.074 million originally reported for the previous month.
Around noon, Federal Reserve Chair Jerome Powell is scheduled to begin testifying before the House Financial Services Committee.
Powell's prepared remarks are likely to mirror those he delivered before the Senate Banking Committee on Tuesday, although traders will still keep an eye on the question-and-answer portion of his testimony.
After showing a substantial rebound over the course of Monday's session, stocks saw further upside during trading on Tuesday. With the upward move, the tech-heavy Nasdaq climbed back within striking distance of last week's record high.
The major averages finished the session firmly positive but off their best levels of the day. The Dow vaulted 526.82 points or 2 percent to 26,289.98, the Nasdaq jumped 160.84 points or 1.8 percent to 9,895.87 and the S&P 500 surged up 58.15 points or 1.9 percent to 3,124.74.
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher on Wednesday, although Japan's Nikkei 225 Index bucked the uptrend and slid by 0.6 percent. China's Shanghai Composite Index inched up by 0.1 percent, while Hong Kong's Hang Seng Index climbed by 0.6 percent.
The major European markets have also moved to the upside on the day. While the French CAC 40 Index has surged up by 1.4 percent, the German DAX Index and the U.K.'s FTSE 100 Index are up by 0.8 percent and 0.7 percent, respectively.
In commodities trading, crude oil futures are slipping $0.31 to $38.07 a barrel after jumping $1.26 to $38.38 a barrel on Tuesday. Meanwhile, an ounce of gold is trading at $1,726, down $10.50 compared to the previous session's close of $1,736.50. On Tuesday, gold climbed $9.30.
On the currency front, the U.S. dollar is trading at 107.37 yen compared to the 107.32 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is trading at $1.1241 compared to yesterday's $1.1264.
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