Futures bounce as investors cheer Apple results

[May 01, 2019]   By Shreyashi Sanyal

(Reuters) - U.S. stock index futures jumped on Wednesday, pointing to a strong open for Wall Street as Apple Inc's stellar results and forecast allayed concerns about slowing growth in corporate profits.

Shares of the iPhone maker jumped 5.8% in premarket trading after it said sales in China were steadying and touted how rising demand for its services and accessories helped offset a record drop in iPhone revenue.

The company also announced plans for a new $75 billion share buyback and bumped up its cash dividend by 5%.

The S&P 500 index clocked another record high close on Tuesday and registered its best four-month rally in nearly nine years.

Analysts are now more optimistic on first-quarter earnings growth and expect a 0.7% rise compared with a 2% fall estimated at the beginning of April, according to Refinitiv data.

Besides a largely better-than-expected earnings season, recent gains in shares have also been powered by positive economic data, a dovish Federal Reserve and hints of progress in U.S.-China trade talks.

Meanwhile, the Fed, which will end its two-day meeting later in the day, is largely expected to keep borrowing costs unchanged and maintain a 'patient' monetary policy stance, despite President Donald Trump's call to cut interest rates.

At 7:10 a.m. ET, Dow e-minis were up 71 points, or 0.27%. S&P 500 e-minis were up 8.5 points, or 0.29% and Nasdaq 100 e-minis were up 51.75 points, or 0.66%.

Among other stocks, Advanced Micro Devices Inc jumped 5.1% after the chipmaker's quarterly revenue and profit beat Wall Street estimates as it sold more chips in data centers and servers. Other chip stocks also rose with Nvidia Corp, Qualcomm Inc and Micron Technology Inc up between 1% and 1.6%.

Traders work on the floor at the New York Stock Exchange (NYSE) in New York, U.S., April 24, 2019. REUTERS/Brendan McDermid

CVS Health Corp added 4.5% after the drugstore chain operator and pharmacy benefits manager raised its full-year profit forecast after reporting a rise in quarterly profit.

Shares of Wynn Resorts Ltd gained 1.8% after Massachusetts gaming regulators allowed the casino operator to keep the license for its new casino near Boston with a $35 million fine.

Apart from earnings reports, investors will also focus on U.S.-China trade talks. U.S. Treasury Secretary Steven Mnuchin said the two countries held "productive" talks in Beijing on Wednesday and will continue discussions in Washington next week.

On the data front, ADP's national employment data for April, due at 8:15 am ET, will likely show an addition of 180,000 jobs, up from 129,000 jobs in March.

Another set of data from the Institute of Supply Management is expected to show manufacturing PMI edged lower to 55.0 in April from 55.3 in March.

(Reporting by Shreyashi Sanyal and Sruthi Shankar in Bengaluru; Editing by Arun Koyyur)

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