Dow Looks To Snap Six-Day Losing Streak As UnitedHealth Surges

(RTTNews) - The major U.S. index futures are currently pointing to higher open on Tuesday, with stocks likely to regain ground after moving sharply lower over the two previous sessions.

Bargain hunting may contribute to initial strength on Wall Street, as traders pick up stocks at relatively reduced levels following the steep drops seen over the past two days.

The Dow fell to a nearly three-month closing low on Monday, while the Nasdaq and the S&P 500 hit their lowest closing levels in almost two months.

After closing lower for six straight sessions, the Dow may lead the rebound amid a surge by shares of UnitedHealth (UNH).

UnitedHealth is spiking by 7.6 percent in pre-market trading after the healthcare giant reported first quarter results that exceeded analyst estimates on both the top and bottom lines.

Financial giant Morgan Stanley (MS) is also likely to see initial strength after reporting better than expected first quarter results.

Meanwhile, shares of Johnson & Johnson (JNJ) are seeing some pre-market weakness despite the healthcare giant reporting first quarter earnings that beat expectations.

Following the steep drop seen last Friday, stocks showed another substantial move to the downside over the course of the trading session on Monday. The major averages moved notably higher early in the session but pulled back sharply as the day progressed.

The major averages all closed firmly in the red, with the tech-heavy Nasdaq showing a particularly steep drop. The Nasdaq plunged 290.08 points or 1.8 percent to 15,885.02, the S&P 500 tumbled 61.59 points or 1.2 percent to 5,061.82 and the Dow slid 248.13 points or 0.7 percent to 37,735.11.

With the extended slump, the Dow fell to a nearly three-month closing low, while the Nasdaq and the S&P 500 hit their lowest closing levels in almost two months.

The early strength on Wall Street partly reflected a positive reaction to earnings news from Goldman Sachs (GS), as the investment banking company reported first quarter earnings that far exceeded analyst estimates on better than expected revenues.

Traders also initially reacted positively to a Commerce Department report showing much stronger than expected U.S. retail sales growth in the month of March.

The Commerce Department said retail sales climbed by 0.7 percent in March after advancing by an upwardly revised 0.9 percent in February.

Economists had expected retail sales to rise by 0.3 percent compared to the 0.6 percent increase originally reported for the previous month.

Excluding a pullback by sales by motor vehicle and parts dealers, retail sales jumped by 1.1 percent in March after climbing by 0.6 percent in February. Ex-auto sales were expected to rise by 0.4 percent.

Buying interest evaporated shortly after the start of trading, however, as the retail sales data triggered another spike by treasury yields.

The yield on the benchmark ten-year note surged to its highest levels in five months, as the data led to renewed concerns about the outlook for interest rates.

Following the latest data, CME Group's FedWatch Tool is currently indicating just a 21.6 percent chance of a quarter point rate cut in June.

"The robust gain in retail sales in March followed by upward revisions in the prior two months shows the consumer continues to power the overall economy forward," said Nationwide Chief Economist Kathy Bostjancic.

However, she added, "The lack of moderation in consumer spending and inflation will undermine Fed officials' confidence that inflation is on a sustainable course back to 2% and likely delays rate cuts to September at the earliest and could push off rate reductions to next year."

Software stocks moved sharply lower over the course of the session, dragging the Dow Jones U.S. Software Index down by 2.4 percent to its lowest closing level in almost two months.

Considerable weakness also emerged among networking stocks, as reflected by the 2.0 percent slump by the NYSE Arca Networking Index. The index tumbled to a four-month closing low.

Interest rate-sensitive commercial real estate stocks also saw significant weakness, with the Dow Jones U.S. Real Estate Index falling by 1.7 percent.

Computer hardware, housing and biotechnology stocks also came under pressure over the courses of the session, moving lower along with most of the other major sectors.

Commodity, Currency Markets

Crude oil futures are falling $0.38 to $85.03 a barrel after slipping $0.25 to $85.41 a barrel on Monday. Meanwhile, after climbing $8.90 to $2,383 an ounce in the previous session, gold futures are inching up $6.80 to $2,389.80 an ounce.

On the currency front, the U.S. dollar is trading at 154.58 yen compared to the 154.28 yen it fetched at the close of New York trading on Monday. Against the euro, the dollar is valued at $1.0646 compared to yesterday's $1.0624.

Asia

Asian stocks tumbled on Tuesday, as bond yields surged and the dollar climbed to more than five-month highs as Middle East tensions persisted and signs of resilient consumer demand in the U.S. meant the Federal Reserve could delay interest rate cuts this year.

Citing a strong economy and labor market alongside lingering inflation, San Francisco Federal Reserve Bank President Mary Daly said during a speech on Monday that there's no urgency to cut interest rates.

Gold dipped in Asian trading, while oil ticked higher as markets awaited Israel's response to Iran's first-ever direct attack on the country.

Chinese markets fell sharply as March data showed feeble demand. Official data showed earlier in the day that Chinese GDP grew 5.3 percent in January-March from the year earlier, beating expectations for a 4.6 percent increase.

At the same time, a raft of March indicators released alongside the GDP data - including property investment, retail sales and industrial output - underlined the persisting weakness in domestic demand.

China's benchmark Shanghai Composite Index slumped 1.7 percent to 3,007.07, while Hong Kong's Hang Seng Index plummeted 2.1 percent to 16,248.97.

Japanese stocks lost ground to hit an eight-week low after a jump in U.S. Treasury yields. The Nikkei 225 Index plunged 1.9 percent to 38,471.20, while the broader Topix Index settled 2.0 percent lower at 2,697.11.

Tech stocks such as Advantest and Tokyo Electron fell around 4 percent each, while Uniqlo-brand owner Fast Retailing dropped 1.8 percent.

Department store operator J. Front Retailing slumped 9.2 percent after slashing its annual profit forecast. Peer Isetan Mitsukoshi gave up 8.3 percent.

Seoul stocks succumbed to heavy selling pressure, with the Kospi diving 2.3 percent to 2,609.63 amid speculation the Bank of Korea will not rush to lower borrowing costs. Rising oil prices amid heightened tensions in the Middle East also rattled markets.

Australian markets fell sharply, dragged down by banks, mining, energy and technology stocks. The benchmark S&P ASX 200 Index slid 1.8 percent to 7,612.50, while the broader All Ordinaries Index ended down 1.8 percent at 7,862.30.

Europe

European stocks have moved sharply lower on Tuesday amid signs of escalating tensions in the Middle East and uncertainty over the Fed's rate trajectory.

Israel is weighing possible response actions to Iran's aggression, but it is not clear if a decision has been made.

In economic news, German wholesale prices dropped 3.0 percent on a yearly basis in March, the same as in February, data from Destatis revealed earlier today. Wholesale prices have been falling since April 2023.

The headline German ZEW Economic Sentiment Index jumped from 31.7 in March to 42.9 in April, beating forecasts.

The ILO U.K. jobless rate rose to 4.2 percent in three months to February from 3.9 percent in three months to January, the Office for National Statistics said.

While the U.K.'s FTSE 100 Index has tumbled by 1.3 percent, the German DAX Index and the French CAC 40 Index are both down by 1.1 percent.

The dollar rose to a five-month high against the euro and pound after the release of stronger-than-expected U.S. retail sales data for March.

Superdry shares have plummeted in London after the struggling retailer said it would delist from the London Stock Exchange as part of a far-reaching restructuring plan.

Dr Martens has also plunged after the shoemaker flagged a challenging 2025 outlook and announced the departure of chief executive Kenny Wilson.

Global payments technology company Wise has also slumped after revenue in its fourth quarter came in below analyst estimates.

Vallourec has also fallen in Paris. The steel tube products manufacturing company said it launched offering of $820 million Senior Notes due 2032.

On the other hand, Sweden's Ericsson has moved sharply higher after posting better-than-expected first-quarter earnings.

German skincare maker Beiersdorf has also moved to the upside after upgrading its 2024 sales guidance.

U.S. Economic Reports

After reporting a substantial rebound in new residential construction in the U.S. in the previous month, the Commerce Department released a report on Tuesday showing housing starts pulled back by much more than expected in the month of March.

The Commerce Department said housing starts plummeted by 14.7 percent to an annual rate of 1.321 million in March after soaring by 12.7 percent to a revised rate of 1.549 million in February.

Economists had expected housing starts to slump by 2.7 percent to an annual rate of 1.480 million from the 1.521 million originally reported for the previous month.

The report said building permits also tumbled by 4.3 percent to an annual rate of 1.458 million in March after jumping by 2.3 percent to a revised rate of 1.523 million in February.

Building permits, an indicator of future housing demand, were expected to dip by 0.3 percent to a rate of 1.514 million from the 1.518 million originally reported for the previous month.

At 9 am ET, Federal Reserve Vice Chair Philip Jefferson is due to speak on "Monetary Policy During Periods of Uncertainty" before the International Research Forum on Monetary Policy.

The Federal Reserve is scheduled to release its report on industrial production in the month of March at 9:15 am ET. Industrial production is expected to rise by 0.4 percent in March after inching up by 0.1 percent in February.

At 12:30 pm ET, New York Federal Reserve President John Williams is due to moderate a discussion before the Economic Club of New York.

Richmond Federal Reserve President Thomas Barkin is scheduled to speak on the economic outlook before the Rotary Club of Winston-Salem at 1 pm ET.

At 1:15 pm ET, Federal Reserve Chair Jerome Powell is due to participate in a moderated discussion before the Washington Forum on the Canadian Economy.