META Meta Platforms Inc

By David Hodari 

U.S. stocks were set for small opening gains on Thursday after the Federal Reserve signaled interest rate-increases were on hold, boosting major indexes to levels not seen since early December.

Futures put the S&P 500 on course to edge 0.1% higher at the open, and the Nasdaq-100 was set to advance 0.5%. The technology-heavy index has outperformed the S&P in January, benefiting from individual tech companies' strong earnings.

While Microsoft was down 2% in premarket trade after its post-close release Wednesday, Qualcomm was set to gain by the same amount after its own report. Facebook shares surged 11% in premarket trading after posting a record quarterly profit.

In other sectors, energy giant ConocoPhillips was up 1.5% and General Electric was up 7.5% in premarket trade after both companies impressed investors with their own earnings reports.

Low expectations this earnings season have allowed equities to recoup most of their losses from December, the worst month for the S&P 500 in 87 years.

"Our worst fears have not been realized and the commentary is that results are good enough. People were worried about whether this was the start of a continuous decline," said Patrick Kaser, managing director and portfolio manager at Brandywine Global.

For all sectors, including tech, "the first half of the year is as bad as it'll get and people are forecasting a recovery in the second half," Mr. Kaser said.

Although U.S. stocks had rallied earlier Wednesday, they extended their gains after the Federal Reserve announced its decision to leave interest rates unchanged. The Dow Jones Industrial Average closed at a high last seen on Dec. 4.

While concerns about the health of global economic growth and what some investors saw as overly aggressive monetary policy roiled markets at the end of 2018, Chairman Jerome Powell's comment Wednesday that "the case for raising rates has weakened somewhat," buoyed indexes around the world.

Mr. Powell didn't say whether the Fed's next rate move was more likely to be an increase or a cut, and reiterated that future decisions would "depend entirely on the data." The decision put nonfarm jobs figures, due out Friday, in particularly sharp focus.

Equities' midweek rally came after the Fed appeared to have "suspended its withdrawal of liquidity and that's a big driver for markets," said Frances Hudson, a global strategist at Aberdeen Standard Investments. "More money in the system has a big impact and it's probably the issue that normally brings an economic or business cycle to a close, but it doesn't have to end with a recession."

The yield on 10-year U.S. Treasurys was last 2.666%, down from 2.694% late Wednesday. Yields and prices move in opposite directions. The WSJ Dollar Index was last down 0.2%, extending its five-day fall to 1.2%.

The Stoxx Europe 600 was flat in early afternoon trading. While its energy constituents rose 1.7% -- Royal Dutch Shell shares climbed 3.8% after the company released earnings and announced further share buybacks, and consumer-goods company Unilever's shares dropped 2.9% following its earnings report. The poor showing combined with weak eurozone gross domestic product figures to sap the region's index of most of its early-day gains.

The yield on 10-year German government bonds dropped to 0.122% from 0.134% late Wednesday, after a weak reading on the country's retail sales.

In Asia, Hong Kong's Hang Seng rose 1.1% to hit a four-month high, with the index's tech constituents among its sharpest climbers after many corporate earnings for that sector.

The yuan increased 0.2% against the dollar, remaining close to a six-month high, as investors absorbed better-than-expected purchasing managers index figures and waited for the second day of high-level trade talks between Beijing and Washington -- though some investors had low expectations.

"I'll be surprised if there's anything interesting that comes out of those meetings. It'll be hard to get anything done in 48 hours, but both sides will want to announce progress," said Craig Birk, chief investment officer at Personal Capital.

Japan's Nikkei advanced 1.1%, with the yen up 0.4% against the dollar, after industrial production numbers beat market expectations. The data outweighed remarks from the Bank of Japan, in which some board members expressed growing concerns about global growth.

In commodities, New York gold prices were up 1% at $1,323 a troy ounce, hitting fresh 8 1/2 -month highs, on the weaker dollar.

Write to David Hodari at David.Hodari@dowjones.com

(END) Dow Jones Newswires

January 31, 2019 08:16 ET (13:16 GMT)

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