U.S. Stocks May Lack Direction Following Recent Strength

After ending the previous session notably higher, stocks may show a lack of direction in early trading on Tuesday. The major index futures are currently pointing to a roughly flat open for the markets, with the S&P 500 futures nearly unchanged.

Traders may take a step back to digest recent strength in the markets, which has lifted the Dow and the S&P 500 to new record highs.

Shares of Goldman Sachs (GS) are likely to see initial strength, however, with the investment bank jumping by 2.9 percent in pre-market trading.

The surge by Goldman Sachs comes after the company reported third quarter results that exceeded analyst estimates on both the top and bottom lines.

Financial giant Bank of America (BAC) may also move to the upside after reporting better than expected third quarter earnings.

Meanwhile, shares of UnitedHealth (UNH) may come under pressure after the health insurance giant reported third quarter results that beat expectations but lowered the top end of its full-year earnings guidance.

On the U.S. economic front, the Federal Reserve Bank of New York released a report showing regional manufacturing activity has returned to contraction in the month of October.

The New York Fed said its general business conditions index tumbled to a negative 11.9 in October from a positive 11.5 in September, with a negative reading indicating contraction. Economists had expected the index to decrease to a positive 2.3.

Despite the downturn in October, the New York Fed said optimism about the six-month outlook grew strongly, with the index for future business activity jumping to a multi-year high of 38.7 in October from 30.6 in September.

Following the strong upward move seen during last Friday’s session, stocks saw further upside during trading on Monday. The major averages all moved higher on the day, with the Dow and the S&P 500 reaching new record closing highs.

The major averages reached new highs for the session late in the day before giving back some ground going into the close. The Dow rose 201.36 points or 0.5 percent to 43,065.22, the Nasdaq jumped 159.75 points or 0.9 percent to 18,502.69 and the S&P 500 climbed 44.82 points or 0.8 percent to 5,859.85.

In overseas trading, stock markets across the Asia-Pacific region turned in another mixed performance on Tuesday. Japan’s Nikkei 225 Index climbed by 0.8 percent, while China’s Shanghai Composite Index tumbled by 2.5 percent and Hong Kong’s Hang Seng Index plunged by 3.7 percent.

The major European markets are also mixed on the day. While the German DAX Index is up by 0.3 percent, the U.K.’s FTSE 100 Index is down by 0.4 percent and the French CAC 40 Index is down by 0.9 percent.

In commodities trading, crude oil futures are plunging $2.98 to $70.85 a barrel after tumbling $1.73 to $73.83 a barrel on Monday. Meanwhile, after falling $10.70 to $2,665.60 an ounce in the previous session, gold futures are rising $7.10 to $2,672.70 an ounce.

On the currency front, the U.S. dollar is trading at 149.01 yen compared to the 149.76 yen it fetched at the close of New York trading on Monday. Against the euro, the dollar is valued at $1.0911 compared to yesterday’s $1.0909.