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Stock-index futures pointed to a higher start for Wall Street for the last day of July on Friday after Apple and Amazon delivered blowout earnings and Facebook and Google parent Alphabet topped expectations.
However the lack of progress in Congress on another financial aid bill, the ongoing rise in coronavirus cases, and Thursday’s discouraging labor market data are all factors which may limit gains.
What are major benchmarks doing?
Futures on the Dow Jones Industrial Average YM00, +0.25% rose 67 points, or 0.3%, to 26,285, while S&P 500 futures ES00, +0.26% gained 8.70 points, or 0.3%, to trade at 3,257.50. Nasdaq-100 futures NQ00, +1.10% NQ00, +1.10% jumped 114.50 points, or 1.1%, to 10,908.50.
The Dow Jones Industrial Average DJIA, -0.85% on Thursday fell 225.92 points, or 0.9%, to end at 26,313.65, while the S&P 500 SPX, -0.37% lost 12.22 points, or 0.4%, to close at 3,246.22. The Nasdaq Composite COMP, +0.42% rose 44.87 points, or 0.4%, to finish at 10,587.81.
What’s driving the market?
Tech earnings were in focus following results from some of the industry’s largest and most powerful players after Thursday’s closing bell, including Apple Inc. AAPL, +1.21%, Facebook Inc. FB, +0.51%, Amazon.com Inc. AMZN, +0.60% and Google parent Alphabet Inc. GOOGL, +0.97% GOOG, +0.62%.
Read:Pandemic? Antitrust? No worries for Big Tech, which racked up $200 billion in sales anyway
“These impressive results will only serve to widen the divide between these huge tech behemoths and the rest of the underlying U.S. market; however, they look set to ensure that U.S. markets start the last day of the week and the month higher,” said Michael Hewson, chief market analyst at CMC Markets, in a note.
Cyclical stocks that rely on economic recovery like banks and retailers were lower in premarket trading Friday though after data Thursday showed a rise in weekly unemployment claims.
Meanwhile, there was no progress in talks between congressional Democrats, Republicans and the White House on a new coronavirus relief bill with expanded unemployment benefits due to expire Friday. Democrats rejected a White House proposal to temporarily extend the $600-a-week in added benefits, saying the Trump administration didn’t understand the severity of the crisis.
The U.S. saw record deaths from COVID-19 in Texas, Florida and Arizona, while California faced its second-deadliest day.
In vaccine news, European drug maker Sanofi SNY, -0.64% said the U.S. government will pay up to $2.1 billion for the COVID-19 vaccine candidate it is developing with GlaxoSmithKline GSK, -0.83% . The funding, part of Operation Warp Speed, will be used to support ongoing clinical development and manufacturing of the experimental candidate, with at least 100 million doses promised to the U.S.
U.S. consumer spending rose 5.6% in June, while personal incomes declined by 1.1%, government data showed. Economists surveyed by MarketWatch had produced a consensus forecast for a 5.9% rise in spending and a 0.8% drop in income. A related measure of core inflation, the Federal Reserve’s favorite gauge of price pressures, rose 0.2%, in line with expectations.
The employment cost index for the second quarter rose 0.5%, versus expectations for a 0.6% rise.A final reading of the University of Michigan’s July consumer sentiment index, due at 10 a.m. Eastern, is expected to come in at 72.9.
Which companies are in focus?
- Shares of Apple were up more than 6% premarket after the iPhone maker reported record profit, crushing Wall Street expectations, and announced a 4-for-1 stock split that will change the pecking order of the price-weighted Dow Jones Industrial Average.
- Amazon shares were up more than 5% ahead of the bell after delivering results that soared past forecasts for sales and earnings.
- Facebook shares rose 6.4% in premarket action after the social-networking giant easily topped expectations for earnings and revenue.
- Alphabet shares were trading near unchanged after the Google parent met expectations despite a dip in advertising revenue.
- Shares of Caterpillar Inc CAT, -2.70% jumped more than 3% premarket after the construction-equipment giant reported earnings and revenue that fell less than expected.
- Oil company Chevron Corp. CVX, -4.21% fell premarket after delivering a wider-than-expected loss and revenue that lagged estimates.
- Shares of oil giant Exxon Mobil Corp. XOM, -4.90% were also lower ahead of the bell after it disappointed on earnings and revenue.
- Ford Motor Co. F, -2.60% shares rose in premarket trade after delivering a narrower-than-expected adjusted loss in the second quarter, with sales cut in half in comparison with a year ago but in line with Wall Street forecasts
- Shares of Merck & Co. Inc. MRK, -0.45% rose 2.8% ahead of the bell after its earnings and revenue beat expectations and the drugmaker raised its outlook.
What are other markets doing?
In Asia, China’s CSI 300 index 000300, +0.83% rose 0.8%, the Shanghai Composite SHCOMP, +0.70% rose 0.7%, Hong Kong’s Hang Seng Index HSI, -0.46% fell 0.5% and Japan’s Nikkei 225 NIK, -2.81% slumped 2.8%.
Stocks were mostly higher in Europe, with the Stoxx 600 Europe index SXXP, +0.51% up 0.5% and the U.K.’s FTSE 100 UKX, -0.19% little changed%.
Gold futures GCQ20, +1.39% were on the rise, while the ICE U.S. Dollar Index DXY, -0.06% was off 0.1%. Oil futures were edging higher, with the U.S. benchmark CLU20, +1.12% up 0.7% on the New York Mercantile Exchange.
The yield on the 10-year Treasury note TMUBMUSD10Y, 0.545% fell 1.6 basis points to 0.534%. Yields move in the opposite direction of prices.
