daytrading may 27 pre-market

Morning traders.

Market wrap:

Futures point to a soft start to the trading week after another buy-the-dip session on Wall Street failed to steady nerves following the ASX's worst week in a year.

The June SPI 200 futures contract retreated six points or 0.1% to 4967 as US stocks closed mixed on Friday and key commodities tallied mild losses.

The S&P 500 repeated Thursday's trading pattern, plunging at the open before clawing back most of its losses. The index closed 0.03% or less than a point in the red at 1,650 after falling as much as 14 points. The Dow made it back into positive territory for a gain of nine points or 0.06% and the Nasdaq lost 0.01%.

"People are still mindful of what the Fed may do as the year progresses," the chief market strategist at Banyan Partners in the US told Bloomberg. "They want to look at the dip and see if it turns into something. If it does not turn into anything, they seem to be coming in in the afternoon. That seems to be the pattern every single day."

The S&P 500 ended lower for the first week in five, losing 1.1% after mid-week comments from Federal Reserve Chairman Ben Bernanke hinted that the central bank may reduce its stimulus program within a few months. Sentiment on Friday was boosted by stronger-than-expected demand for durable goods. Orders increased by 3.3% in April, more than twice the growth that economists had expected.

Cyclical stocks were weaker than the overall market, suggesting softer risk appetite. The Morgan Stanley Cyclical Index slumped 1.04% and the Dow Jones Transportation Average 0.53%. Small caps were steady.

Australia's big two miners fell in US trade despite further signs that the price of iron ore is stabilising. BHP lost 1.18% and Rio gave up 1.47%. Spot iron ore was unchanged on Friday at US$123.20 per dry metric tonne.

Most commodities eased as China's weak manufacturing report continued to weigh on demand expectations. The 19-commodity Thomson Reuters-Jefferies CRB index lost roughly half a percent. West Texas Intermediate crude oil for July delivery fell 38 cents or 0.4% to US$93.87 a barrel for its fourth straight loss.

Gold finished down on the day but ahead for the week as the US dollar pared its recent rally. Gold for August delivery dropped $6.70 or 0.5% to US$1,386.10 an ounce.

A mixed night on the London Metal Exchange saw most industrial metals drift lower as traders weighed positive signals from the US against the Chinese manufacturing miss. US copper for July delivery dipped 0.3% or one cent to US$3.29 a pound. In London, copper dipped 0.4%, aluminium 0.1%, nickel 0.9% and zinc 0.3%. Lead added 0.3% and tin 0.6%.

For a second night, European markets caught the fall on Wall Street but closed ahead of the recovery. Germany's DAX gave up 0.56%, France's CAC 0.26% and Britain's FTSE 0.54%.

TRADING THEMES THIS WEEK

US PUBLIC HOLIDAY: Trading in the US is suspended tonight for the Memorial Day public holiday. That might be the circuit-breaker the ASX needs to find a floor after last week's dramatic plunge. At the least it should limit how far the index moves over the first two sessions of the week. Trading in the UK is also suspended tonight for a public holiday.

YIELD STOCKS IN SPOTLIGHT: Last week saw the ASX's biggest decline in a year as a wave of profit-taking swept through the market's best-performing sectors. These included the so-called yield sectors, such as financials, utilities and telecoms. The likeliest explanation is that international investors were repatriating profits as the Australian dollar fell further below parity with the greenback. Short-term, the yield stocks and the XJO look oversold, but last week may have signalled an important turning point in one of the major trading trends of recent years. The dollar was this morning trading nearly half a cent stronger at 96.45 US cents.

ECONOMIC NEWS: The domestic calendar is clear until Wednesday, then brings: construction work, new home sales, leading index (Wed); building approvals, private capital expenditure (Thu); and business confidence and private-sector credit (Fri). China releases April industrial profits data at 11.30am EST today and the official May manufacturing report on Saturday. With a public holiday tonight, the US calendar is weighted towards the end of the week. Highlights include: consumer confidence (tomorrow); weekly jobless claims, GDP (Thu); and personal income, consumer spending, Chicago PMI and consumer sentiment index (Fri).

Good luck to all.