U.S. Stock Futures Rise as Tech Leads Charge
By Caitlin Ostroff
U.S. stock futures rose on strong earnings and renewed investor
enthusiasm for big technology companies.
Futures tied to the tech-heavy Nasdaq-100 led markets, rising
0.4%, indicating the index may climb further after notching its
third record high this year on Wednesday. Contracts tied to the
broader S&P 500 rose 0.2%, as did those linked to the Dow Jones
Investors are watching earnings closely to see if they support
the strong run across markets in recent months. Many have bet on an
economic recovery this year as Covid-19 vaccinations ramp up,
increasing prospects for future earnings.
Shares of Travelers, a major property-casualty insurer, climbed
3.1% in premarket trade after it logged an increase in quarterly
profit and a modest rise in net written premiums. Regional bank
KeyCorp rose 2.4% after it recorded higher revenue and a larger
profit, with increased activity in its consumer-mortgage and
investment-banking businesses driving fees. Meanwhile, Ford Motor
climbed 4.4% premarket.
Chip giant Intel and International Business Machines are slated
to announce results after markets close.
"Earnings season looks relatively good and seems to confirm this
picture that the U.S. -- because there was no full lockdown -- did
well in the fourth quarter," said Carsten Brzeski, ING Groep's
global head of macro research. "Stock markets are really looking
through the short-term outlook for the economy, which has worsened
over recent days."
Fresh data showed that 900,000 Americans filed first-time claims
for unemployment benefits for the week ended Jan. 16, as companies
continued to lay off workers amid a surge in Covid-19 cases. New
data also showed that U.S. housing starts picked up again in
Investors are paying close attention to corporate guidance in
the sectors most affected by the pandemic. In offhours trading,
shares of United Airlines fell 1.7% after the airliner said it
expected the coronavirus to continue to weigh on travel demand this
Supporting markets is the expectation that central banks and
governments will step in if financial conditions deteriorate. This
has encouraged investors to seek out higher returns, including in
Japan's Nikkei 225 Index rose 0.8% Thursday and is trading near
its highest level in 30 years. India's benchmark stock gauge, the
S&P BSE Sensex Index, hit a record high Wednesday. Indexes in
China and South Korea rallied, with the Shanghai Composite up 1.1%
and Korea's Kospi gaining 1.5%.
The backstop from governments and central banks -- plus
consensus among investors for a strong economic recovery this year
-- has squeezed volatility out of the market. The Cboe Volatility
Index, known as the VIX and seen as Wall Street's fear gauge, was
at 21.25 Thursday, its lowest since December.
A day after President Biden was inaugurated, money managers are
keeping a close eye on his proposed Covid relief package, and the
prospects for it proceeding through Congress.
While stocks have taken their cue from the stimulus plans,
investors in bonds have been more skeptical of a big spending push,
keeping yields relatively subdued, said Daniel Morris, BNP Paribas
Asset Management's chief market strategist.
The yield on the benchmark 10-year Treasury note ticked up to
1.107% Thursday, from 1.089% Wednesday. Yields rise when bond
"At least one part of the market is saying 'nice idea,' but if
you really thought you'd get $1.9 trillion in stimulus, yields
would be higher," said Mr. Morris.
Overseas, the pan-continental Stoxx Europe 600 rose 0.3%. The
materials and information technology sectors led gains, while
industrials and energy sectors lost ground.
Meanwhile, the European Central Bank held steady on interest
Write to Caitlin Ostroff at email@example.com
(END) Dow Jones Newswires
January 21, 2021 09:06 ET (14:06 GMT)
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