U.S. Stocks May See Initial Strength On Optimism About End Of Government Shutdown

(RTTNews) - Stocks are likely to move to the upside in early trading on Monday, regaining ground following the notable weakness seen last week. The major index futures are currently pointing to a sharply higher open for the markets, with the S&P 500 futures up by 1.0 percent.

The upward momentum on Wall Street comes after the Senate voted to advance legislation to end the government shutdown, which recently became the longest in U.S. history.

The Senate voted 60-40 in favor of a temporary funding bill, which would also reverse some of the recent mass federal layoffs.

Several Democratic Senators broke with party leaders in favor of moving forward with the legislation, as it does call for a vote on the extension of enhanced Obamacare tax credits.

Final approval of the bill could be delayed by any one Senator, and the legislation still needs to be approved the Republican-controlled House of Representatives.

While the markets have largely shrugged off concerns about the shutdown in recent weeks, the news may still lead traders to pick up stocks at somewhat reduced levels following recent valuation worries.

The end of the shutdown would also lead to the resumption of the release of key U.S. economic data that has recently been withheld.

"A key impact on the markets of the impasse, beyond the hit to the wider economy, has been the lack of data as key releases on areas like the jobs market have been delayed," said AJ Bell investment director Russ Mould.

"This has created a considerable dose of the uncertainty which markets famously hate and it is also hampering the ability of the Federal Reserve to make informed decisions on interest rates," he added. "In this context, it's not a surprise to see investors react positively to signs of progress."

After initially extending the sharp pullback seen during Thursday's session, stocks showed a significant rebound over the course of the trading day on Friday. The major averages climbed well off their lows of the session, with the Dow and the S&P 500 reaching positive territory.

The major averages ended the day narrowly mixed. While the Nasdaq dipped 49.46 points or 0.2 percent to 23,004.54 after plunging by as much as 2.1 percent, the S&P 500 inched up 8.48 points or 0.1 percent to 6,278.80 and the Dow rose 74.80 points or 0.2 percent to 46,987.10.

For the week, the tech-heavy Nasdaq plummeted by 3.0 percent, while the S&P 500 tumbled by 1.7 percent and the Dow slumped by 1.2 percent.

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Monday. Japan's Nikkei 225 Index surged by 1.3 percent, while South Korea's Kospi spiked by 3.0 percent and China's Shanghai Composite Index rose by 0.5 percent.

The major European markets have also moved to the upside on the day. While the German DAX Index is up by 1.8 percent, the French CAC 40 Index is up by 1.5 percent and the U.K.'s FTSE 100 Index is up by 0.9 percent.

In commodities trading, crude oil futures are increasing $0.25 to $60 a barrel after rising $0.32 to $59.75 barrel last Friday. Meanwhile, after climbing $18.80 to $4,009.80 an ounce in the previous session, gold futures are surging $98.90 to $4,108.70 an ounce.

On the currency front, the U.S. dollar is trading at 154.01 yen versus the 153.40 yen it fetched at the close of New York trading on Friday. Against the euro, the dollar is trading at $1.1569 compared to last Friday's $1.1565.