Futures rise on current earnings, United Airlines rises

(Reuters) – U.S. stock index futures edged up slightly on Wednesday after major banks started reporting season with mixed profits, while United Airlines stock rose after forecasting at least a quadrupling in earnings for the year.

As the reporting season picks up pace, investors will be focused on how corporate America is coping with high interest rates and challenging demand conditions.

Shares of United Airlines Holdings Inc rose 2.6% in premarket trading as the company also reported fourth-quarter earnings that beat Wall Street estimates on strong travel demand.

Analysts now expect annual profits for S&P 500 companies to decline 2.4% for the quarter, according to Refinitiv data, compared with a 1.6% decline at the start of 2023.

“Given the challenging backdrop, some institutional investment market participants fear that U.S. earnings forecasts may still be too high for 2023, with stocks in other countries failing to maintain their current strength,” said Russ Mold, chief investment officer at Hey. Jay Bell.

Big US banks’ earnings have been mixed, with many hoarding for a rainy day in preparation for an impending recession.

At 6:17 am ET, the Dow e-mini was up 19 points, or 0.06%, the S&P 500 e-mini was up 6 points, or 0.15%, and the Nasdaq 100 e-mini was up 16 .5 points, or 0.14%.

Wall Street’s major indices started the holiday-shortened week on a mixed note, with the Dow Jones Industrial Average posting a four-day streak of gains and the Nasdaq posting seven straight gains, the longest since November 2021.

Among other shares, IBM Corp lost 1.9% after Morgan Stanley downgraded the company’s stock to “equilibrium” from “overweight”, citing slower revenue growth.

Moderna Inc stock jumped 6.7% after the company said its experimental respiratory syncytial virus (RSV) messenger RNA vaccine was 83.7% effective in preventing the disease in adults aged 60 and over.

Investors are now waiting for quarterly results from Charles Schwab Corp, PNC Financial Services Group Inc and Discover Financial Services on Wednesday.

U.S. stock markets posted a strong rally in 2023 after a dismal last year on hopes that slowing inflationary pressures and some signs of a cooldown in the labor market could give the Federal Reserve the cover to scale down interest rate hikes.

Retail sales data and final producer prices for December will be released before the bell.

(Reporting by Shubham Batra, Shreyashi Sanyal and Amruta Khandekar in Bangalore; edited by Shonak Dasgupta)

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