Futures gain as Apple earnings take some focus off virus concerns

By Sruthi Shankar

(Reuters) – U.S. stock index futures rose on Wednesday as strong results from Apple and other marquee companies kicked fourth-quarter earnings into top gear and overshadowed concerns over the economic impact of the fast-spreading coronavirus.

Apple Inc (O:) gained 1.9% in premarket trading after reporting earnings for the holiday shopping quarter above analysts’ expectations, even as it braced for more supply disruptions in virus-hit China.

U.S. equities stabilized on Tuesday on hopes of strong corporate earnings reports, helping them recover from a selloff earlier this week on fears of fallout from the coronavirus outbreak on global growth.

China’s President Xi Jinping said on Wednesday that preventing and containing the new coronavirus remains a grim and complex task, the state television reported.

The United States and Japan evacuated their nationals from a quarantined city in China, while British Airways suspended flights as deaths rose to 132 and the first cases emerged in the Middle East.

Starbucks Corp (O:) fell 1.3% after warning of a financial hit from the virus outbreak as it closed thousands of restaurants and adjusted operating hours in China.

“Global supply chains have proliferated in their size and complexity, so companies globally have more potential to be impacted,” Seema Shah, chief strategist at Principal Global Investors, wrote in a note.

The Federal Reserve will conclude its latest policy meeting on Wednesday with interest rates almost certainly to remain on hold, but officials are likely to discuss possible changes to how they manage the central bank’s key overnight borrowing rate.

At 7:26 a.m. ET, rose 101 points, or 0.35%. S&P 500 e-minis gained 12.25 points, or 0.37% and were up 44.25 points, or 0.49%.

Boeing Co (N:) shares rose 1.7% in choppy trading after the planemaker said it expects more than $18 billion in costs related to 737 MAX grounding and indicated it would cut production of its bigger 787 Dreamliner aircraft.

Facebook (O:), set to report earnings after market close, was up 1.6%. Brokerage Raymond James upgraded the stock to “strong buy” on hopes of a solid earnings growth.

Advanced Micro Devices Inc (O:) dropped 4.4% after the chipmaker forecast first-quarter revenue largely below analysts’ estimates due to waning demand from gaming console makers.

General Electric (N:) jumped 6.5% after the industrial conglomerate reported quarterly profit and cash flow that exceeded analysts’ estimates, boosted by its aviation unit.

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