This post was originally published on this site
U.S. stock-index futures pointed to a higher start for the market Thursday as investors awaited weekly data on jobless claims and continued to assess corporate earnings.
For the week so far all three major benchmarks are up and on track for gains for a second week in a row and for February to date, with the small cap Russell 2000 RUT, -0.72% outpacing the S&P 500 index SPX, -0.03% for the week, the month and year.
What are major indexes doing?
- Futures on the Dow Jones Industrial Average YM00, +0.18% rose 61 points, or 0.2%, to 31,389.
- S&P 500 futures ES00, +0.26% gained 10.10 points, or 0.3%, to trade at 3,913.
- Nasdaq-100 futures NQ00, +0.45% were up 55.75 points, or 0.4%, at 13,699.25.
The Dow DJIA, +0.20% eked out a gain Wednesday to close at a record, while the S&P 500 SPX, -0.03% closed fractionally lower for a back-to-back loss and the Nasdaq Composite COMP, -0.25% snapped a four-day winning streak that had taken it to a series of records. The small-cap Russell 2000 RUT, -0.72% also pulled back from record territory, falling 0.7% to end a seven-day streak of wins.
What’s driving the market?
Expectations that Congress will deliver another fiscal stimulus package close in size to President Joe Biden’s $1.9 trillion proposal has been a major driver of a global equity rally, analysts said. Subdued U.S. inflation data on Wednesday helped blunt fears that a surge in prices could prompt the Federal Reserve to pull back on monetary stimulus sooner than expected.
Investors “seem happy to keep buying the dips as they look forward to more U.S. stimulus while expecting that the ongoing central bank bond buying is likely to keep the downside limited for stocks,” said Fawad Razaqzada, market analyst at ThinkMarkets, in a note.
Fed Chairman Jerome Powell on Wednesday reiterated that the Fed won’t slow its asset purchases until the central bank’s 2% inflation target is exceeded.
A declining pace of COVID-19 infections and the continued rollout of vaccines has also bolstered investor appetite for stocks, analysts said.
Earnings season also remains under way, with results largely topping admittedly low-bar estimates. About 80% of the big firms that have already reported their latest results beat projections and their aggregate earnings in the three months to December have surpassed estimates by over 17%.
A busy week of earnings will continue on Thursday. PepsiCo PEP, -1.36%, Kraft Heinz KHC, +0.53% and Kellogg K, +0.82% are among the names set to report before the market opens. Disney DIS, +0.75% and Expedia EXPE, +3.06% will give their quarterly reports after the bell on Thursday.
Also, shares of cannabis-related companies were in the spotlight after investors on Reddit’s WallStreetBets forum, the same group that stoked a spike in shares of videogame retailer GameStop Inc. GME, +1.77%, encouraged each other to snap up shares.
Data on first-time claims for U.S. unemployment benefits are due at 8:30 a.m. Eastern. Economists look for first-time claims to have fallen to 760,000 in the week ended Feb. 5 from 779,000 the previous week.
Which companies are in focus?
- PepsiCo Inc. PEP, -1.36% shares rose 0.6% in premarket trade after the beverage and snack company early Thursday reported fourth-quarter profit that topped expectations, revenue that rose above forecasts and raised its dividend.
- Shares of Kraft Heinz Co. KHC, +0.53% were up 1.7% after the company delivered results that beat Wall Street expectations and said it had reached an agreement to sell its Planters nuts business to Hormel Foods Corp. HRL, +0.71% in a cash deal valued at $3.35 billion. The news was first reported by The Wall Street Journal earlier this month. Hormel shares were up 0.3%.
- Shares of Uber Technologies Inc. UBER, +5.99% TK in premarket activity after the ride-hailing company late Wednesday said fourth-quarter gross bookings rose 16% from the previous quarter, but its revenue fell short of expectations.
- Zynga Inc. ZNGA, -1.50% shares TK after the gaming company late Wednesday reported a surge in revenue and bookings.
- Bloom Energy Corp. BE, -0.98% shares TK after the clean-energy company’s bottom-line results late Wednesday fell short of Wall Street expectations.
- Shares of iRobot Inc. IRBT, +0.82% jumped after the robot maker late Wednesday reported fiscal fourth-quarter results.
- Best Buy Co. BBY, +0.30% notified workers this week that it was cutting some jobs at its big-box stores, The Wall Street Journal reported, citing people familiar with the situation, in response to the shift to online shopping.
