U.S. Stocks May See Continued Strength On Upbeat Tech Earnings
Stocks are likely to extend the strong upward move seen over the past few sessions in early trading on Wednesday. The major index futures are currently pointing to a higher open for the markets, with the S&P 500 futures up by 0.8 percent.
Technology stocks are likely to lead an early advance on Wall Street, as reflected by the 1.4 percent jump by the Nasdaq 100 futures.
The upward momentum for the tech sector comes following upbeat earnings from some big-name companies like Google parent Alphabet (GOOGL).
Shares of Alphabet are soaring by 10 percent in pre-market trading after the tech giant reported fourth quarter result that exceeded analyst estimates on both the top and bottom lines.
Alphabet also announced a 20-for-1 stock split, which has led to speculation the stock could be headed for inclusion in the Dow.
Chipmaker Advanced Micro Devices (AMD) is also seeing substantial pre-market strength after reporting better than expected fourth quarter results and providing upbeat guidance.
Shares of General Motors (GM) may also move to the upside after the auto giant reported fourth quarter earnings that beat expectations and raised its 2022 forecast.
On the other hand, shares of Starbucks (SBUX) may come under pressure after the coffee giant reported weaker than expected fiscal first quarter earnings.
The futures did not show much reaction to a report from payroll processor ADP unexpectedly showing a sharp pullback in U.S. private sector employment in the month of January.
ADP said private sector employment plunged by 301,000 jobs in January after jumping by a downwardly revised 776,000 jobs in December.
The steep drop surprised economists, who had expected private sector employment to increase by 207,000 jobs compared to the spike of 807,000 jobs originally reported for the previous month.
“The labor market recovery took a step back at the start of 2022 due to the effect of the Omicron variant and its significant, though likely temporary, impact to job growth,” said ADP chief economist Nela Richardson.
Stocks showed a lack of direction throughout much of the trading session on Tuesday but managed to end the day mostly higher. With the upward move, the major averages added to the strong gains posted in the two previous sessions.
The major averages moved to the upside going into the close, ending the session near their best levels of the day. The Dow advanced 273.38 points or 0.8 percent to 35,405.24, the Nasdaq climbed 106.12 points or 0.8 percent to 14,346.00 and the S&P 500 rose 30.99 points or 0.7 percent at 4,546.54.
In overseas trading, stock markets across the Asia-Pacific region moved higher on Wednesday, with several major markets still closed for holidays. Japan’s Nikkei 225 Index surged by 1.7 percent, while Australia’s S&P/ASX 200 Index jumped by 1.2 percent.
The major European markets are also seeing further upside on the day. While the German DAX Index has risen by 0.4 percent, the French CAC 40 Index and the U.K.’s FTSE 100 Index are up by 0.7 percent and 0.8 percent, respectively.
In commodities trading, crude oil futures are jumping $1.18 to $89.38 a barrel after inching up $0.05 to $88.20 a barrel a barrel on Tuesday. Meanwhile, an ounce of gold is trading at $1,805.10, up $3.60 compared to the previous session’s close of $1,801.50. On Tuesday, gold rose $5.10.
On the currency front, the U.S. dollar is trading at 114.32 yen compared to the 114.71 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is trading at $1.1323 compared to yesterday’s $1.1272.
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