Stock Futures Edge Up After S&P 500 Hits Record
By Joe Wallace
U.S. stock futures pointed to fresh gains for major indexes
already at record highs, amid another volley of blue-chip
Futures tied to the S&P 500 ticked up 0.2% after the
benchmark stocks gauge posted its 22nd all-time closing high of
2021 on Thursday. Contracts for the Dow Jones Industrial Average,
which also hit a record, rose 0.2%. Futures for the
technology-heavy Nasdaq-100 index gained 0.3%.
A strong start to earnings season from banks and other financial
companies has combined with data showing the economy is growing at
a rapid clip to propel stocks higher this week. Adding to the
momentum: A drop in yields on U.S. government bonds that has
surprised some investors in its size and speed.
Shares of Morgan Stanley wavered ahead of the bell after the
investment bank said profit more than doubled in the first quarter,
becoming the latest Wall Street firm to report a blowout start to
the year. Citizens Financial Group, Bank of New York Mellon, PNC
Financial Services Group and custodian and fund manager State
Street also posted quarterly results.
Data out Friday showing the Chinese economy grew at a record
rate of 18.3% in the first quarter will add to optimism about the
U.S.'s economic prospects, said Remi Olu-Pitan, multiasset fund
manager at U.K. investment firm Schroders.
"Maybe we should notch up our expectations a bit in the U.S. and
even in Europe," she said.
Among other movers, shares of PPG Industries rose more than 5%
in premarket trading after the paint manufacturer said improving
industrial demand would boost profits in the current quarter.
Shares of DraftKings climbed 4% after it was named an official
sports betting partner of the NFL.
J.B. Hunt Transport Services, considered a transportation
bellwether, gained 1.4% on higher profits and revenues for the
first quarter. Meantime, Alcoa said it expected strong results in
the second quarter, lifting the aluminum maker's shares 3.3%.
Overseas, the Stoxx Europe 600 rose 0.6%, led by shares of banks
and makers of cars and car parts. Daimler gained 2.8% after the
German auto maker said sales of Mercedes-Benz cars would push
first-quarter results above analysts' forecasts.
Shares of Bank of Ireland jumped about 8.5%. The lender said it
had agreed potentially to buy all of KBC Bank Ireland's performing
loans. German meal-kit maker HelloFresh climbed 2.6% after raising
its revenue guidance for 2021.
Asian markets were broadly higher. China's Shanghai Composite
Index rose 0.8% by the close and Japan's Nikkei 225 edged up
The yield on 10-year Treasury notes rose to 1.575%, up from
1.531% Thursday but still down from 1.664% at the end of last week.
Yields move in the opposite direction to bond prices. Rising yields
injected volatility into the stock market in the first quarter by
knocking shares of large technology companies.
Daniel Morris, chief market strategist at BNP Paribas Asset
Management, said falling yields call into question some aspects of
the "reflation trade," in which investors bought stocks that stood
to gain from a burst of inflation and economic activity.
Yields have fallen because the Federal Reserve has started to
convince investors that it won't bump up interest rates to ward off
higher inflation, Mr. Morris said. "The Fed's been messaging this
for a while but the market finally seems to be believing it."
Other investors, such as Ms. Olu-Pitan, say yields have fallen
because overseas money managers, especially in Japan, have made
large purchases of U.S. government debt.
Write to Joe Wallace at Joe.Wallace@wsj.com
(END) Dow Jones Newswires
April 16, 2021 09:28 ET (13:28 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.