STOCK futures are pointing to a higher opening today as the dollar weakened and investors try to snap a three-day losing streak.
Stocks have been trading in the opposite direction of the dollar in recent months. As the dollar weakens, it has pushed the value of commodities higher because they become cheaper for foreign investors. Gold hit a new record high today. Strong commodity prices also helps push the price of energy and material stocks higher.
Overseas markets showed strength. European markets are sharply higher after new data showed the economic recovery is gathering pace in the 16 countries that use the euro.
US investors will get plenty of economic data during the holiday-shortened week to sort through and determine if the stock market’s rally has outpaced any actual recovery in the economy.
Multiple reports on the housing market and strength of the consumer as well as data on the nation’s total economic output in the third quarter will be released before the Thanksgiving holiday Thursday.
A new report today is expected to show existing home sales rose 1.4% in October as first-time homebuyers rushed to try and close purchases before a tax credit was set to expire. The credit, which was due to end at the end of the month, was subsequently extended into 2010.
The National Association of Realtors is expected to report sales rose to a seasonally adjusted annual rate of 5.65 million, up from 5.57 million in September, according to economists polled by Thomson Reuters. It would be the highest sales rate in more than two years.
The collapse of the housing market helped push the economy into recession. Data on sales, prices and mortgage delinquencies continues to show a recovery in the sector remains choppy.
Ahead of the opening bell, Dow Jones industrial average futures rose 92, or 0.9%, to 10,395. Standard & Poor’s 500 index futures rose 10.70, or 1%, to 1,100.80, while Nasdaq 100 index futures gained 17.00, or 1%, to 1,780.50.
The dollar mostly fell against other major currencies. The ICE Futures US dollar index declined 0.55 to 75.11.
Gold prices rose sharply, hitting a new record. Gold climbed $18.70 to $1,165.50 an ounce Monday. It rose as high as $1,167.80 earlier in trading.
Stocks slipped Friday for the third straight day amid ongoing worries about the pace of an economic recovery after computer maker Dell Inc. reported disappointing quarterly results. A stronger dollar also helped push stocks lower.
The Dow dipped 0.1%, while the S&P fell 0.3%. The tech-heavy Nasdaq composite index fell 0.5%.
Bond prices fell today. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.40% from 3.37% late Friday. The yield on the three-month T-bill, considered one of the safest investments, rose to 0.03% from 0.01%.
As investors sold off stocks late last week, they moved into safer investments like bonds, which helped push yields of short-term government-backed debt to their lowest levels since last December amid the mushrooming credit crisis.