Wednesday January 29th

29-01-2020

Stocks set to rise as Apple leads parade of companies reporting strong earnings

U.S. stock index futures rose on Wednesday morning as markets continue to rebound from Monday’s heavy sell-off, led by solid gains from Apple after the tech giant reported better-than-expected earnings. At around 7:10 a.m. ET, Dow Jones Industrial Average futures were up 109 points, indicating a gain of nearly 150 points at the open. S&P 500 and Nasdaq 100 futures also pointed to strong gains at the open. Apple shares gained more than 1% in the premarket after its quarterly results easily beat analyst expectations. The company’s results were driven in part because of an 8% uptick in iPhone sales, which totaled $55.96 billion. “Apple pleasantly surprised investors on multiple fronts,but most importantly materially exceeded investor expectations on iPhone revenues, which returned to growth in the quarter much ahead of investor expectations,” J.P. Morgan analyst Samik Chatterjee said in a note. McDonald’s, another Dow component, also posted better-than-expected quarterly results but the stock dropped 0.4%. Dow and ADP also reported profits that beat analyst estimates. So far, nearly 25% of S&P 500 companies have reported results for the previous quarter. Of those companies, nearly 72% have beaten analyst expectations, FactSet data shows. Wednesday’s gains were capped, however, by a 2.4% loss in Boeing shares. The aerospace giant’s stock declined after Boeing said it expects 737 Max costs to roughly double what the company expected. Wednesday’s gains come after the Dow snapped a five-day losing streak with a gain of more than 180 points. That move up helped the major indexes recover some of the losses from the largest sell-off of the year, which happened Monday amid global concern over the spread of the Chinese coronavirus. Chinese officials said late Tuesday that the death toll has risen to 132 with total cases in China now standing at 5,974. The White House told U.S. airlines on Tuesday that the administration is considering a suspension of flights from China to the U.S. Investors will be closely watching the U.S. Federal Reserve on Wednesday afternoon, as the central bank convenes for its first monetary policy meeting of the decade. The main interest rate is widely expected to hold steady in the 1.50% to 1.75% range, but the market will likely be attuned late in the session to Fed Chair Jerome Powell’s speech, particularly any comments about the Fed’s repo program or the potential economic impact of the coronavirus outbreak. Shares in Hong Kong plummeted on Wednesday as the city’s markets returned from a holiday amid coronavirus fears. The Hang Seng index declined 2.82% to close at 27,160.63. Markets in China remain closed on Wednesday for a holiday. In other Asian markets, Japan’s Nikkei 225 was up 0.71% to close at 23,379.40 while the Topix index gained 0.45% to end its trading day at 1,699.95. South Korea’s Kospi also added 0.39% to close at 2,185.28. Oil prices rose for a second day on Wednesday, recouping some losses after a five-day rout on talk that OPEC could extend oil output cuts if a new coronavirus hurts demand, while data showing a decline in U.S. stockpiles helped steady prices. Brent crude rose 81 cents, or 1.4%, to $60.36 per barrel. U.S. West Texas Intermediate crude was up 81 cents, or 1.5%, at $54.29 per barrel. Gold rose on Wednesday, propped up by lingering concerns over the economic impact of a coronavirus outbreak in China, while investors awaited a policy decision from the U.S. Federal Reserve later in the day. Spot gold was up 0.3% at $1,571.07 an ounce, having fallen about 1% in the previous session after positive U.S. economic data drove a recovery in equities. U.S. gold futures were little changed at $1,570.60 an ounce.