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(Reuters) – Wall Street’s main indexes were set to bounce on Tuesday following the benchmark S&P 500’s worst day in a month as investors parsed through a deluge of corporate earnings, while bracing for volatility ahead of Election Day.
Merck & Co Inc (N:MRK) gained 1.2% premarket as it raised its full-year earnings forecast. Drugmaker Eli Lilly and Co (N:LLY) fell about 4% after its quarterly profit took a hit from increased costs to develop a COVID-19 treatment.
Microsoft Corp (O:MSFT) firmed 0.8% in the run-up to its results after the closing bell. Apple Inc (O:AAPL), Amazon.com (O:AMZN), Google-parent Alphabet (O:GOOGL) and Facebook Inc (O:FB), which account for about a fifth of the S&P 500’s total value, also report results this week.
“Overhanging the market is the growth of the virus in the U.S., and technology in particular seems the least exposed sector,” said Rick Meckler, partner, Cherry Lane Investments, a family investment office in New Vernon, New Jersey.
“A focus on the big technology companies may move this market to rally despite the problems the virus is creating.”
Record number of new coronavirus infections in the United States and some European countries and a stalled U.S. fiscal stimulus raised worries about a fledgling economic recovery, sending the three major U.S. stock indexes to near four-week lows on Monday.
Wall Street’s fear gauge (VIX) hovered at its highest level in nearly two months on uncertainty about the outcome of the election.
Democratic challenger Joe Biden leads President Donald Trump in national polls but the race is much tighter in battleground states which determine the election outcome.
At 08:09 a.m. ET, Dow E-minis <1YMcv1> were up 0.32% at 27,669 points and S&P 500 E-minis rose 0.46% to 3,409 points. Nasdaq 100 E-minis were up 0.61% at 11,563 points.
Insurer American International Group Inc (N:AIG) jumped 6.4% after its board approved a plan to separate the life and retirement business from the rest of the company, and named President Peter Zaffino as chief executive officer, effective next year.
Semiconductor designer Advanced Micro Devices Inc (O:AMD) rose 0.3% as it agreed to buy Xilinx Inc (O:XLNX) in a $35 billion all-stock deal that will intensify its battle with Intel Corp (O:INTC) in the data center chip market. Xilinx shares soared about 15%.
Industrial companies 3M Co (N:MMM) and Caterpillar Inc (N:CAT) also dropped about 1% after reporting results.
