Profit Taking May Contribute To Early Weakness On Wall Street

The major U.S. index futures are pointing to a lower opening on Tuesday following the modest strength seen in the previous session. Profit taking may contribute to early weakness on Wall Street after the Dow climbed to a new record closing high for the ninth consecutive session on Monday.

However, overall trading activity may remain somewhat subdued amid another quiet day on the U.S. economic front. Traders may be reluctant to make significant moves ahead of the release of reports on labor productivity and costs and producer and consumer price inflation in the coming days.

Remarks by Federal Reserve officials may also attract attention later this week, as traders look for clues about the outlook for monetary policy.

In a speech on Monday, St. Louis Fed President James Bullard said the current level of interest rates is likely to remain appropriate over the near term amid subdued inflation.

Stocks moved modestly higher during trading on Monday, adding to the slim gains posted last Friday. With the upward move on the day, the Dow climbed to a new record closing high for the ninth consecutive session.

The major averages all closed in positive territory, although the tech-heavy Nasdaq outperformed its counterparts. While the Nasdaq climbed 32.21 points or 0.5 percent to 6,383.77, the Dow edged up 25.61 points or 0.1 percent to 22,118.42 and the S&P 500 rose 4.08 points or 0.2 percent to 2,480.91.

The modest strength on Wall Street partly reflected ongoing positive sentiment following last Friday’s upbeat monthly jobs report.

A Labor Department report said non-farm payroll employment surged up by 209,000 jobs in July after spiking by an upwardly revised 231,000 jobs in June. Economists had expected employment to climb by 183,000 jobs.

The stronger than expected job growth added to optimism about the economy but also raised concerns about the outlook for interest rates.

However, a lack of major U.S. economic data kept some traders on the sidelines ahead of reports on producer and consumer price inflation and labor productivity and costs in the coming days.

Remarks by several Federal Reserve officials may also attract attention this week, as traders look for clues about the future of monetary policy.

Traders may also have been reluctant to make significant moves amid geopolitical uncertainty after the United Nations imposed stringent new sanctions on North Korea for its escalating nuclear and missile programs.

Steel stocks showed a substantial move to the upside,…

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