By William Watts and Chris Matthews, MarketWatch
Netflix shares jump premarket after third-quarter results
Stock-index futures pointed to a higher start for Wall Street
Thursday, getting a boost after U.K. and European Union negotiators
agreed on a draft Brexit deal.
Read:EU and U.K. leaders say Brexit deal has been agreed
(http://www.marketwatch.com/story/eu-and-uk-leaders-say-brexit-deal-has-been-agreed-2019-10-17)
The tentative pact, which was hailed by European Commission
President Jean-Claude Juncker and British Prime Minister Boris
Johnson must still be approved by the U.K. parliament and other EU
member states. Johnson has called for a U.K. parliamentary vote on
Saturday.
What are major indexes doing?
Futures on the Dow Jones Industrial Average rose 85 points, or
0.3%, at 27,027, while S&P 500 futures advanced 10.85 points,
or 0.4%, to 3,002.25. Nasdaq-100 futures gained 33.50 points, or
0.4%, to 7,982.50.
Stocks ended with small losses
(http://www.marketwatch.com/story/stock-futures-point-slightly-lower-as-worries-remain-over-us-china-deal-2019-10-16)
in a range-bound session on Wednesday. The Dow lost 22.82 points,
or 0.1%, to close at 27,001.98, while the S&P 500 gave up 5.99
points, or 0.2%, to end at 2,989.69. The Nasdaq Composite finished
at 8,124.18, off 24.52 points, or 0.3%.
What's driving the market?
The Brexit headlines sent the British pound soaring and also
lifted European stocks
(http://www.marketwatch.com/story/mixed-corporate-results-from-nestle-and-unilever-keep-european-stocks-to-a-tight-range-2019-10-17),
though analysts cautioned that the agreement could still be
derailed. Northern Ireland's Democratic Unionist Party, a key ally
of U.K. Prime Minister Boris Johnson's Conservative Party, said it
remained opposed to the draft agreement.
"It remains to be seen whether the reaction is short-lived as
the politicians go toe-to-toe again at the weekend, but in the
meantime the very possibility of an agreed outcome to the painful
Brexit saga has resulted in a relief rally, both financial and
psychological," said Richard Hunter, head of markets at Interactive
Investor.
Meanwhile, U.S. stocks have reacted positively overall to the
start of third-quarter earnings reporting season.
"Even though it is very early in the Q3 earnings reporting
period, investors have been encouraged by the better-than-expected
results for the large diversified banks and selected health care
companies," said Sam Stovall, chief investment strategist at CFRA,
in a note.
That enthusiasm was offset Wednesday by weaker-than-expected
September retail sales numbers, while uncertainty around U.S.-China
trade talks continues to cast a cloud over the market. Overall, the
potential for elevated volatility is expected to remain a concern
for investors since October has recorded nearly 40% higher
volatility than the other 11 months since World War 2, Stovall
said, noting CFRA still expects to see share prices end the year
higher on an improvement in earnings per share expectations.
A busy day for U.S. economic data is ahead, with weekly jobless
claims data is due at 8:30 a.m. Eastern Time. Economists surveyed
by MarketWatch, on average, look for first-time claims of 215,000
for the week ended Oct. 12, up from 210,000 the previous week.
Separately, data on U.S. September housing starts and building
permits are also due at 8:30 a.m., as is the Philadelphia Fed's
regional activity index for October. Data on September industrial
production and capacity utilization is set for 9:15 a.m.
Federal Reserve Board Gov. Michelle Bowman is scheduled to
deliver remarks at an event in Chicago at 2 p.m. New York Fed
President John Williams is due to deliver a speech and take part in
a discussion in Manhattan at 4:20 p.m.
What companies are in focus?
Shares of Honeywell International Inc.(HON) may be in focus
after its third-quarter results topped Wall Street forecasts.
Morgan Stanley(MS) shares rose 4% before the start of trade
Thursday after the investment bank reported third-quarter profits
and sales that beat Wall Street expectations.
Philip Morris International Inc.(PM), also reported
third-quarter results Thursday, announcing that earnings fell less
than analysts had anticipated, though revenue rose less than
expected. The tobacco company's stock rose 1.1% in premarket
action.
Shares of Netflix Inc.(NFLX) were 7.9% higher in premarket
action after it reported third-quarter results
(http://www.marketwatch.com/story/netflix-stock-spikes-after-subscriber-growth-bounces-back-but-executives-admit-competition-will-hurt-the-rest-of-the-year-2019-10-16)
late Wednesday. The streaming service said it added 6.77 million
new paying subscribers in the quarter, with only 500,000 coming
from the U.S.
Opinion:Netflix finally admits the obvious: Competition from
Apple and Disney will hurt
(http://www.marketwatch.com/story/netflix-finally-admits-the-obvious-competition-from-apple-and-disney-will-hurt-2019-10-16)
Shares of International Business Machine Inc.(IBM) were in focus
after it reported less revenue than Wall Street expected
(http://www.marketwatch.com/story/ibm-stock-slips-after-revenue-misses-street-view-2019-10-16)
after Wednesday's closing bell. The stock was off 4.8% in premarket
activity.
Rail-based freight company CSX Corp. (CSX) also reported
earnings after the close of trade Wednesday. Third-quarter profits
unexpectedly rose and revenue fell in line with analyst forecasts.
Shares were up 3.1% before the start of trade.
How are other markets trading?
European stocks were on the rise following the news of a
tentative Brexit deal, with the FTSE up 0.3% and the Stoxx Europe
600 advancing 0.1%.
In Asia overnight, stocks closed mostly higher, as the China CSI
300 rose 0.1% and Hong Kong's Hang Seng index added 0.7%. Japan's
Nikkei 225 edged 0.1% lower.
Crude oil prices were falling, with West Texas Intermediate
crude for November delivery down about 50 cents to $52.85 a barrel.
Gold prices edged lower and the U.S. dollar fell 0.3%, according to
the ICE U.S. dollar index .
(END) Dow Jones Newswires
October 17, 2019 07:43 ET (11:43 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.