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© Reuters.By Peter Nurse
Investing.com – U.S. stocks are set to post strong gains Wednesday, helped by reports of a breakthrough in the fight to combat China’s coronavirus outbreak. The continuing earnings season on Wall Street will also generate attention, with General Motors (NYSE:) looking to avoid replicating Ford’s slump after the bell on Tuesday.
At 7:00 AM ET (1200 GMT), futures for the traded 23 points, or 0.7%, higher, futures for the up 77 points, or 0.8%, while the futures contract rose 210 points, or 0.7%.
Earlier Wednesday, reports emerged that a Chinese university had found a drug to treat people with the new coronavirus, while researchers in the U.K. said they had made a “significant breakthrough” in finding a vaccine. Neither has apparently been tested yet.
These reports have not been verified, but they add to the more positive tone started by China’s central bank trimming interest rates and injecting billions of yuan of liquidity into the markets.
The coronavirus continues to claim victims, as the mainland China death toll increased to 494, while confirmed cases rose to 24,598. But it looks like the pace of the spread is slowing, and it’s still the Hubei province, where the virus was first noticed, that has suffered the vast majority of fatalities.
Away from virus concerns, attention is set to turn to those companies reporting earnings during the day.
Walt Disney (NYSE:) impressed after reporting after hours Tuesday that the number of subscribers to its new streaming service more than doubled in its first three months, to over 28 million. However, it said operating profit could take a hit of $175 million in the current quarter due to the closure of its theme parks in Shanghai and Hong Kong.
On the flip side, Ford’s shares slumped more than 10% after hours after the car manufacturer posted a $1.7 billion quarterly loss and issued a lower-than-expected profit outlook for 2020.
Rival General Motors (NYSE:) is due to report before the bell, with analysts expecting earnings of 1 cent a share on sales of $31.3 billion.
Staying with autos, Tesla (NASDAQ:) stock could be due a retracement Wednesday after heady gains so far this week. It soared another 14% Tuesday, up 36% in just the past two sessions and 180% in the past three months.
The spotlight will also be on eBay (NASDAQ:) Wednesday, after the Wall Street Journal reported that Intercontinental Exchange, the owner of the NYSE, has made a takeover offer for the online marketplace that could value it at more than $30 billion.
Merck reported fourth quarter earnings that beat analysts’ forecasts but the focus is likely to be on news that the pharmaceuticals giant is set to spin off its slow-growth products into a new company.
ADP’s release is due at 08:15 AM ET (1315 GMT), ahead of Friday’s key official employment report. Also of note is the number for January at 10:00 AM ET (1500 GMT).
In the oil markets, crude futures recovered strongly Wednesday, up from the one-year lows they hit on Tuesday, helped a little by a smaller-than-expected rise in U.S. inventories reported by the American Petroleum Institute. Eyes will now turn to the release of the official inventories number at 1030 AM ET (1530 GMT).
AT 07:00 AM ET (1200 GMT), futures traded 2.3% higher at $50.77 and the international benchmark contract rose 2.5% to $55.31.
