Futures rise as Facebook lifts high-growth stocks

[October 31, 2018]  By Shreyashi Sanyal

(Reuters) - U.S. stock index futures rose on Wednesday, setting Wall Street for a second straight day of gains at the end of a brutal month, with Facebook's quarterly report helping boost high-growth internet names.

Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., October 30, 2018. REUTERS/Brendan McDermid

Shares of Facebook Inc <FB.O> climbed 5 percent in premarket trading after the social media giant eased investor concerns by forecasting that margins would stop shrinking after 2019 as costs from scandals ease up.

While Facebook reported a second-straight quarter of record-low user growth, confirming investors' fears of a slowing growth, analysts said the results were not as bad as feared.

That brought some relief to the so-called FANG group. Amazon.com Inc <AMZN.O> rose 1.7 percent, Netflix Inc <NFLX.O> climbed 2.2 percent and Google-parent Alphabet Inc <GOOGL.O> gained 1.5 percent.

The FANG group and Apple Inc <AAPL.O> have led the slide on Wall Street this month, which has left the S&P 500 and Dow Industrials with barely any gains for the year, fanned by concerns over trade, higher borrowing and wage costs, fears of corporate earnings peaking and a host of geopolitical worries.

The S&P has not posted gains for two sessions in a row so far in October, during which the index has tumbled nearly 8 percent, on pace for its biggest monthly drop in more than eight years.

However, the U.S. economy has been growing at a healthy clip. The ADP national employment report at 8:15 a.m. ET (1215 GMT) is expected to show private payrolls rose by 189,000 this month, following a rise of 230,000 jobs in September. That comes ahead of the more comprehensive non-farm payrolls report on Friday.

At 7:31 a.m. ET, Dow e-minis <1YMc1> were up 161 points, or 0.65 percent. S&P 500 e-minis <ESc1> were up 19 points, or 0.71 percent and Nasdaq 100 e-minis <NQc1> were up 72 points, or 1.06 percent.

EBay Inc <EBAY.O> rose 6.1 percent after the company topped profit expectations, helped by cost cutting efforts.

Electronic Arts Inc <EA.O> dropped 4.6 percent after the video-game publisher's revenue forecast missed estimates due to the delayed launch of its popular "Battlefield V" game.

(Reporting by Shreyashi Sanyal in Bengaluru; Editing by Sriraj Kalluvila)

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