U.S. Markets: Trading Volume Drops Substantially Ahead Of The Earnings Season

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Current Futures: Dow -92.00, S&P -9.80, NASDAQ -25.00

U.S. Markets are trading down by a little more than 1.5%, as investors wait for the earnings season to begin in full throttle mode.

Market participants await the earnings result of Alcoa, the first major company that is due to report its earnings over the second quarter on Wednesday. In particular, the present earnings season is very important because it can justify (or not) the strong rally started in March, where the major U.S. indexes advanced as much as 40%, TheLFB-Forex.com Trade Team said. More importantly, investors will focus on the banking sector earnings, to see if the “miracles” from the first quarter still have legs, and on the retail companies, to gauge consumers’ behavior over the prior quarter. Since consumer spending mostly drives the U.S. economy, the earnings reports are likely to have a substantial influence in the financial market.

Over the last few days of trading, the market has been trading on light trading volume in the European and in the U.S. markets. Some analysts are blaming this on Goldman Sachs, who reportedly turned off its trading software after some part of its trading codes were taken by an ex-employee. Particularly, the last two days of trading in the cash market had been very light, especially in the European markets, where the U.K. FTSE moved only on half of the volume recorded over the last few weeks of trading. However, TheLFB-Forex.com Trade Team argues that most investors are waiting the earnings season to kick in, something that should trigger higher volumes in the equity markets.

The Dow Jones Index fell 144.27 points (1.73%) to 8,180.60, while the S&P 500 index declined 15.59 points (1.73%) to 883.13.

Crude oil for July delivery was recently trading at $62.80 per barrel, lower by $1.20. Tuesday was the sixth consecutive day in which oil declined, time in which it lost almost 15%.

Gold for July delivery was recently trading higher by $3.90 to $928.20. Gold managed to hold its value on Tuesday, even though crude oil headed lower.

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