FILE PHOTO: A Wall Street sign is pictured outside the New York Stock Exchange in New York, October 28, 2013. REUTERS/Carlo Allegri/File Photo
July 29, 2021
By Sagarika Jaisinghani
(Reuters) -The S&P 500 and the Dow indexes were set to rise on Thursday as a slate of strong corporate earnings reports and data showing a pickup in U.S. economic growth reinforced optimism around a steady post-pandemic recovery.
Ford Motor Co jumped 4.9% in premarket trading and was on course to open at a two-week high as it lifted its profit forecast for the year.
Industrials Boeing Co and Caterpillar Inc, and banks including JPMorgan Chase & Co, Bank of America Corp and Citigroup Inc gained between 0.7% and 1.4%, a day after the Federal Reserve said it was not yet time to start withdrawing its massive pandemic-era monetary stimulus.
The central bank’s comments also assuaged fears that a rise in cases of the Delta variant would hurt a solid U.S. economic rebound. Data on Thursday showed gross domestic product increased at a 6.5% annualized rate in the second quarter, while jobless claims fell to 400,000 for the week ended July 24.
“What really stands out (in the GDP data) is consumption; it really means that consumers are carrying the economy,” said Peter Cardillo, chief market economist at Spartan Capital Securities.
Trading on Wall Street in the past few months has also been dictated by rising inflation, and fears that higher prices would not be as transient as expected have recently knocked the benchmark S&P 500 off record highs.
Investors are now focused on the June reading of the personal consumption expenditures price index – the Fed’s main inflation measure, which is due on Friday.
“Once we have normalized our supply chains, there won’t be much of this inflation pressure, which can be achievable in the next six months, but the spread of the Delta variant is a wild card, which could derail the recovery process,” said Arthur Weise, chief investment officer at Kingsland Growth Advisors.
At 8:50 a.m. ET, Dow e-minis were up 143 points, or 0.41%, and S&P 500 e-minis were up 7.25 points, or 0.17%.
Futures tracking the Nasdaq 100 index were down 25.5 points, or 0.17%, with muted trading in the shares of technology behemoths Apple Inc, Amazon.com Inc, Netflix Inc and Google-parent Alphabet Inc.
The group has tended to underperform the broader market during times of economic optimism, when investors prefer stocks such as mining and energy, which are expected to benefit more from a steady business recovery.
Facebook Inc fell 3.2% as it warned revenue growth would “decelerate significantly” following Apple’s recent update to its iOS operating system that would impact the social media giant’s ability to target ads.
KFC-owner Yum Brands Inc, on the other hand, gained 2.8% after beating expectations for quarterly sales.
China’s Didi Global jumped 17.6% after a report said it was considering going private to placate Chinese authorities and compensate investor losses since the ride-hailing firm listed in the United States. Didi denied what it called a “rumor” that it could go private.
Focus later in the day will be on shares of Robinhood Markets Inc, which is scheduled to start trading on Nasdaq under the ticker “HOOD” after the company raised $2.1 billion in its initial public offering on Wednesday.
(Reporting by Sagarika Jaisinghani, Sruthi Shankar and Shashank Nayar in Bengaluru; editing by Uttaresh.V and Aditya Soni)
Source: One America News Network
