S&P, Nasdaq 100 futures are higher after Apple and Facebook beat estimates
US stock index futures were higher in overnight trading on Wednesday after major averages posted losses for the day.
Futures contracts linked to the Dow Jones Industrial Average gained 36 points. S&P 500 futures gained 0.35% while Nasdaq 100 futures gained 0.68%.
The strong quarterly results from Apple and Facebook have fueled the future. Sales rose 54% for the quarter, with each product category posting double-digit growth, according to Apple. The company also announced it would increase its dividend by 7% and approved share buybacks of $ 90 billion. Facebook revenue increased 48% due to more expensive ads.
The major averages closed in the red during normal trading. The Dow lost 165 points and lost 0.48%. The S&P 500 hit a record high but failed to sustain those gains and closed 0.08% lower. The Nasdaq Composite was down 0.28%.
The Federal Reserve said Wednesday that it would keep interest rates near zero. The S&P slid from its high after Federal Reserve Chairman Jerome Powell said during a press conference following the Federal Open Market Committee’s decision that there was some signs of froth in the market.
“Interest rates are unchanged for now, and despite the improvement in economic data, the cone talk was off the table at today’s Federal Reserve meeting,” said Bethany Payne, portfolio manager at Janus Henderson.
“As vaccination rates accelerate, employment boosts and expansionary fiscal policies continue to support household and corporate incomes, investors are now looking for signs of whether the central bank’s safety net may be pulled out sooner than expected,” she added.
Thursday is the busiest day of the winning season. Around 11% of the S&P 500 is to be updated quarterly. Caterpillar, McDonald’s, Comcast, and Merck are among the names on deck before the market opens. Amazon, Gilead Sciences, Twitter, US Steel and Western Digital will publish quarterly results after the market closes.
According to Refinitiv, as of Wednesday morning, 86% of the S&P 500 components reported were above earnings estimates, with earnings 22.7% above expectations. In terms of sales, 77% of companies exceeded expectations.
The economic data released on Thursday will give investors a glimpse of the progress of the economic recovery. The first jobless claim numbers are published, with economists polled by Dow Jones expecting a pressure of 528,000. Pending home sales are also posted.
“The primary market trend remains positive,” said Keith Lerner, chief marketing strategist at Truist. “We expect a more troubled environment, however, as tensions between better economic growth and better earnings prospects versus the potential for higher taxes and rising interest rates as the economy normalizes,” he added.
Thursday marks the 100th day of President Joe Biden’s tenure. On Wednesday evening, he will call on Congress to get an additional $ 1.8 trillion in new expenses and tax credits for children, students and families, senior administrators said.
Become a smarter investor with CNBC Pro.
Get stock picks, analyst calls, exclusive interviews and access to CNBC TV.
Sign in to start a free trial today