Futures higher on strong earnings season; Apple in focus

[August 01, 2017]  By Tanya Agrawal

(Reuters) - U.S. stock index futures started the month on a strong note, with Dow futures surging 100 points on Tuesday, driven by a set of upbeat earnings reports and ahead of Apple's quarterly results.

* Shares of Dow-component Apple  were up 0.36 percent in premarket trading. The company is due to report results after the closing bell.

* The Dow industrials hit a record closing high on Monday, helped by Boeing, while selling in technology companies kept the S&P 500 in check and pulled the Nasdaq lower.

* Tech stocks have been volatile in the past few months, following a record-setting rally that has made the sector the best performer this year.

* Investors have been counting on earnings to support high valuations for equities. The S&P 500 is trading at about 18 times earnings estimates for the next 12 months, above its long-term average of 15 times.

* S&P 500 earnings are expected on average to have grown 10.8 percent in the second quarter, according to Thomson Reuters I/B/E/S.

* Economic data expected later in the day includes core PCE numbers - the Federal Reserve's preferred metric to gauge inflation - for June that is expected to have edged up 0.1 percent from a similar increase in May.

* Softening inflation and incessant political turmoil has hit prospects of another rate hike this year. Traders are pricing in a 47 percent chance of a December hike, compared with a 50 percent probability a month ago, according to CME's Fedwatch tool.

* Construction spending numbers and manufacturing activity for June are also expected.

Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., July 19, 2017. REUTERS/Brendan McDermid

* Oil traded near $53 a barrel, close to a two-month high, supported by signs that a persistent inventory glut is starting to ease and strong global demand, although stronger OPEC production kept a lid on gains. [O/R]

* Pfizer was up 0.63 percent after the drugmaker's quarterly revenue fell slightly but it increased the mid-point of its profit guidance.

* Factory automation equipment maker Emerson Electric fell 2 percent after the company's quarterly profit fell.

* Under Armour edged down 0.61 percent after the sportswear maker cut its revenue forecast.

Futures snapshot at 7:08 a.m. ET (1108 GMT):

* Dow e-minis were up 100 points, or 0.46 percent, with 28,695 contracts changing hands.

* S&P 500 e-minis were up 5.25 points, or 0.21 percent, with 147,627 contracts traded.

* Nasdaq 100 e-minis were up 20 points, or 0.34 percent, on volume of 24,865 contracts.

(Reporting by Tanya Agrawal in Bengaluru; Editing by Anil D'Silva)

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