Market Snapshot: Dow, S&P 500 set for records as stock futures point mostly higher

What’s driving the market?

Analysts said Friday’s disappointing April jobs report, which saw U.S. nonfarm payrolls rise by 266,000 versus a consensus forecast for an increase of 1 million, continued to provide a positive backdrop for equities.

Read: Here’s why the Dow and S&P 500 hit records despite a weak April jobs report

“In our view, the jobs report shows a surprising pause in the labor market recovery, coming at a time when the underlying fundamentals and alternative data are pointed towards acceleration,” wrote analysts at Credit Suisse, in a note.

“Nevertheless, this report should delay any discussion of withdrawing accommodation until a decisive labor market rebound takes place,” they said. “As such, we continue to expect positive equity returns, but at the expense of increased near-term volatility.”

See: Weak jobs report belies U.S. recovery under way — but are international stock markets a better bet now?

Investors were tracking developments around a cyberattack on a vital pipeline that delivers around 45% of fuel consumed on the East Coast. Georgia-based Colonial Pipeline over the weekend said it closed the pipeline was the target of a ransomware attack.

Gasoline futures
RB00,
+1.16%
were up more than 1%, though analysts said pump prices may avert a rise if operations are restored within a few days. Oil futures also moved higher.

Tech and other growth-oriented stocks, which are expected to grow earnings faster than their peers, were buoyed Friday as the jobs data sparked a retreat for Treasury yields. Those shares appeared set to resume their recent underperformance, however, as yields pushed to the upside on Monday.

Need to Know: This is the ‘greatest threat’ to Big Tech’s S&P 500 dominance, Goldman says

The yield on the 10-year Treasury note
TMUBMUSD10Y,
1.582%
was little changed early Monday. Yields and bond prices move in opposite directions.

Meanwhile, a strong earnings season was moving into its final stage.

Through Friday, 88% of S&P 500 companies had reported earnings covering the first quarter, according to FactSet. The index is now reporting the highest year-over-year growth in earnings since for the first quarter since 2010, said John Butters, senior earnings analyst at FactSet, in a note.

Analysts also expect double-digit earnings growth for the remaining three quarters of 2021. These above-average growth rates are due to a combination of higher earnings for 2021 and an easier comparison to unusually weak earnings in 2020 due to the negative impact of COVID-19 on numerous industries, Butters said.

Which companies are in focus?

• American depositary receipts for BioNTech SE
  BNTX,
  +9.35%
  jumped 9% in premarket action after the German biotechnology group, which co-developed the first COVID-19 vaccine to win regulatory approval with Pfizer Inc.
  PFE,
  +1.00%,
  on Monday reported a surge in revenues.

• U.S. Foods Holding Corp.
  USFD,
  +1.10%
  reported earnings and revenue that topped forecasts and said it wouldn’t provide guidance due to pandemic-related uncertainty. Shares were inactive in premarket trade.

• Shares of Energizer Holdings Inc.
  ENR,
  +2.33%
  rose 4% after the battery maker delivered results that blew past Wall Street forecasts.

• Marriott International Inc.
  MAR,
  +2.88%
  shares were down 1.8% after the hotel operator announced earnings that beat estimates but revenue that fell short.

• Shares of Tyson Foods Inc.
  TSN,
  +0.55%
  were on the rise after the protein manufacturer reported fiscal second-quarter earnings and sales that beat expectations.

What are other markets doing?

• The ICE U.S. Dollar Index
  DXY,
  -0.19%,
  a measure of the currency against a basket of six major rivals, was off 0.1%.

• Oil futures were higher, with the U.S. benchmark
  CL00,
  +0.62%
  up 0. 9% at $65.48 a barrel. Gold futures
  GC00,
  +0.61%
  edged higher, up 0.5% around $1,841.20 an ounce.

• The pan-European Stoxx Europe 600
  SXXP,
  +0.07%
  and London’s FTSE 100
  UKX,
  -0.18%
  were trading near unchanged. In Asia, Hong Kong’s Hang Seng Index
  HSI,
  -0.05%
  fell 0.1%, while Japan’s Nikkei 225
  NIK,
  +0.55%
  rose 0.5% and the Shanghai Composite
  SHCOMP,
  +0.27%
  gained 0.3%.

• Crypto assets were in focus, with parody coin dogecoin
  DOGEUSD,
  -11.01%
  dropping sharply following the airing of a heavily hyped episode of “Saturday Night Live” guest-hosted by Tesla Inc.
  TSLA,
  +1.33%
  CEO Elon Musk. Ether coins that run on the Ethereum blockchain, however, were trading near records above $4,000.

Check out: What the dogecoin army is saying as the cryptocurrency’s tumble triggers a bearish break in the long-term trend line