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Stock futures rise after better-than-expected Big Tech earnings, Facebook and Apple shares jump
PUBLISHED WED, APR 28 20216:04 PM EDTUPDATED MOMENTS AGO
Thomas Franck
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Pippa Stevens
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Wall Street set for higher open after strong earnings from Apple, Facebook
U.S. stock index futures rose on Thursday after blowout earnings results from two of the biggest tech companies: Apple and Facebook.
Futures contracts tied to the Dow Jones Industrial Average gained 132 points. S&P 500 futures rose 0.7%, with the benchmark poised to set another record. Nasdaq 100 futures gained 1%.
Investors pointed to strong earnings results from both iPhone maker Apple and social media platform Facebook in explaining Thursday’s gains.
Apple said that sales jumped 54% during the quarter, with each product category seeing double-digit growth. The company also said it would increase its dividend by 7%, and authorized $90 billion in share buybacks. Apple shares were up nearly 3% in early trading.
Facebook’s revenue jumped 48%, driven by higher-priced ads. Facebook surged more than 7% in the premarket. Qualcomm shares soared 5% in early trading after reporting a 52% jump in revenue.
Cruise stocks jumped after the CDC said sailings from U.S. ports could begin mid-July. Carnival and Norwegian shares jumped more than 2% in premarket trading.
“The primary market trend remains positive,” said Keith Lerner, chief market strategist at Truist. “But we expect a choppier environment as tensions are set to persist between better economic growth and earnings prospects versus the potential for higher taxes and rising interest rates as the economy normalizes,” he added.
Thursday marks President Joe Biden’s 100th day in office. On Wednesday evening, he made his first address to a joint session of Congress where he pushed his so-far popular agenda, which includes a $2 trillion infrastructure plan as well as a freshly unveiled, $1.8 trillion plan for families, children and students.
Thursday is the busiest day of the quarterly earnings season, with roughly 11% of the S&P 500 slated to provide quarterly updates.
McDonald’s published its results before the opening bell Thursday and told investors that its sales have finally topped pre-pandemic levels. The Dow component also raised its outlook for systemwide sales growth.
Caterpillar beat expectations and traded higher, while Merck was trading lower following disappointing results. Amazon, Gilead Sciences, Twitter, U.S. Steel and Western Digital will post quarterly results after the market closes.
Economic data released Thursday will give investors an update on the progress of the economic recovery.
First-quarter GDP will be released at 8:30 a.m. ET and is expected to show a 6.5% annual increase in economic activity, according to Dow Jones estimates. Initial jobless claims numbers will also be released, with economists surveyed by Dow Jones expecting an increase of 528,000, about the same as last week. Pending home sales figures are also due.
The major averages closed in the red during normal trading Wednesday. The Dow slid 165 points for a loss of 0.48%. The S&P 500 hit a record high but couldn’t hold onto those gains and closed 0.08% lower. The Nasdaq Composite declined 0.28%.
The Federal Reserve said Wednesday that it would hold 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 are some signs of froth in the market.
“Rates remain unchanged for now and, despite improving economic data, taper talk remained off the table at today’s Federal Reserve meeting,” said Bethany Payne, portfolio manager at Janus Henderson.
“As vaccination rates accelerate, employment strengthens, and expansive fiscal policy adds further support to household and business incomes, investors are now looking for signs of whether the central bank safety net could be withdrawn sooner than expected,” she added.