U.S. Stocks May Give Back Ground After Last Week's Rally

(RTTNews) - Stocks may move to the downside in early trading on Monday, giving back ground after moving sharply higher last week. The major index futures are currently pointing to a lower open for the markets, with the S&P 500 futures down by 0.6 percent.

Traders may look to cash in on last week's rally, which saw the major averages stage a significant recovery from the sharp pullback seen earlier in November.

The major averages have closed higher for five consecutive sessions, clawing their way back toward their record highs.

Stocks have recently benefitted from renewed optimism about the outlook for interest rates following dovish comments from leading Federal Reserve officials.

CME Group's FedWatch Tool is currently indicating an 87.4 percent chance the Fed will lower interest rates by another quarter point at its monetary policy meeting next week.

However, the release of key U.S. economic data in the coming days could impact Fed officials' thinking, potentially keeping traders on edge.

Not long after the start of trading, the Institute for Supply Management is scheduled to release its report on manufacturing activity in the month of November.

The ISM's manufacturing PMI is expected to inch up to 49.0 in November after slipping to 48.7 in October, although a reading below 50 would still indicate contraction.

The Commerce Department is also due to release its report on construction spending in the month of October. Construction spending is expected to edge down by 0.1 percent in October after rising by 0.2 percent in September.

With traders returning to their desks following the Thanksgiving Day holiday on Thursday, stocks extended their pre-holiday rally during trading on Friday. The major averages all moved to the upside on the day, closing higher for the fifth consecutive session.

The major averages ended the day just off their highs of the session. The Dow climbed 289.30 points or 0.6 percent to 47,716.42, the Nasdaq advanced 151.00 points or 0.7 percent to 23,365.69 and the S&P 500 rose 36.48 points or 0.5 percent to 6,849.09.

For the holiday-interrupted week, the Nasdaq spiked by 4.9 percent, the S&P 500 surged by 3.7 percent and the Dow jumped by 3.2 percent.

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Monday. Japan's Nikkei 225 Index slumped by 1.9 percent, while China's Shanghai Composite Index climbed by 0.7 percent.

Meanwhile, the major European markets have all moved to the downside on the day. While the German DAX Index is down by 1.3 percent, the French CAC 40 Index is down by 0.7 percent and the U.K.'s FTSE 100 Index is down by 0.2 percent.

In commodities trading, crude oil futures are climbing $0.58 to $59.13 a barrel after slipping $0.10 to $58.55 barrel last Friday. Meanwhile, after surging $52.60 to $4,254.90 an ounce in the previous session, gold futures are jumping $33 to $4,287.90 an ounce.

On the currency front, the U.S. dollar is trading at 154.82 yen versus the 156.15 yen it fetched at the close of New York trading on Friday. Against the euro, the dollar is trading at $1.1642 compared to last Friday's $1.1595.