Stock Futures Rise on Renewed Tech Surge
By Anna Hirtenstein
Technology shares led U.S. stock futures higher ahead of a
blockbuster week in earnings, with investors awaiting results from
companies such as Apple, Tesla and Facebook.
Futures tied to the S&P 500 ticked up 0.3%, pointing to an
extension of gains that saw the index close nearly 2% higher and
notch a record Friday. Futures linked to the Nasdaq-100 advanced
1%, suggesting a rally in tech stocks after the opening bell.
China's most valuable internet company, Tencent Holdings, jumped
nearly 11% to a record high in Hong Kong trading. Tencent portfolio
company Kuaishou Technology, a TikTok-like video-recording app,
announced a coming IPO that may value it at about $60 billion.
Amsterdam-listed shares of tech investment group Prosus, one of
Tencent's biggest shareholders, rose 5.5%.
More than one-fifth of the broad S&P 500 index and a third
of Dow Jones Industrial Average components are scheduled to release
earnings this week. Kleenex and Huggies maker Kimberly Clark is set
to report Monday before the market opens. Starbucks, Verizon and
Microsoft are slated for Tuesday. Other major tech firms are
reporting later in the week, including Apple, Tesla and Facebook on
"The way that management will communicate their outlook will be
key for markets," said Sophie Chardon, a cross-asset strategist at
Lombard Odier. "Investors will have to weigh the possibility of
vaccinations with the reality of new lockdowns" and the impact on
Ahead of the opening bell, Apple shares climbed 2.3%. Microsoft
and Facebook both rose nearly 2%. Online marketplace Etsy added
The pandemic and months of stay-at-home orders have split the
economy into companies that benefit and those that suffer. The
biggest tech companies are largely seen as benefactors, as firms
and households increase their use of digital technology as they
The spread of new coronavirus variants has prompted retightened
lockdown measures around the world and more uncertainty around the
timeline of a return to normal, which may translate to another
boost in demand for tech.
In premarket trading, real-estate firm Tishman Speyer's
special-purpose acquisition company TS Innovation Acquisitions
soared over 100% after it said it would merge with Latch, a smart
lock maker, to take the company public.
Also ahead of the opening bell, GameStop's stock surged over
40%, with more than a million shares changing hands. The videogame
retailer has been at the center of a fight between bullish day
traders communicating on the internet forum Reddit, and short
sellers, who bet heavily against the stock. Hedge fund Melvin
Capital is among those that lost money from this.
Overseas, the pan-continental Stoxx Europe 600 rose 0.1%. Travel
stocks were among the worst performers. Politicians in the U.K. and
France are contemplating tighter restrictions amid the spread of
coronavirus mutations, according to analysts at RBC Capital
Markets. British Airways owner International Consolidated Airlines
tumbled 7.3%, Ryanair slipped 5.5% and Deutsche Lufthansa was down
EDF slumped over 16% following reports that France and the
European Union won't reach an agreement to restructure the French
utility company in the near future.
European Central Bank's policy makers including President
Christine Lagarde and Philip Lane, chief economist, will hold
speeches Monday. Ms. Lagarde is expected to speak at the World
Economic Forum's annual Davos conference, which will take place
this week, albeit virtually.
In Asia, most major stock benchmarks rose. The Shanghai
Composite Index added 0.5% and Hong Kong's Hang Seng Index climbed
2.4%, buoyed by a rally in tech shares. South Korea's Kospi Index
advanced 2.2%. The index's heavyweight Samsung Electronics rose 3%
and chip maker SK Hynix ticked up over 5%. Both are slated to
report earnings this week.
In bond markets, the yield on the benchmark 10-year U.S.
Treasury bond stood at 1.082%, down from 1.090% Friday.
Negotiations over President Joe Biden's plan for additional
fiscal stimulus will be an area of focus for investors. His
proposal for a $1.9 trillion spending package was discussed by
lawmakers in a call Sunday and is likely to be worked on this
Sebastian Mackay, a multiasset fund manager at Invesco, thought
a package could be passed in the next couple of weeks. For markets,
"it's about the extent to which the Fed is still in play, while the
fiscal stimulus is coming through," he said.
Write to Anna Hirtenstein at email@example.com
(END) Dow Jones Newswires
January 25, 2021 07:17 ET (12:17 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.