Stock futures flat as earnings pour in; Fed decision looms

[October 30, 2019]  By Arjun Panchadar

(Reuters) - U.S. stock index futures were little changed on Wednesday as investors digested a fresh batch of earnings reports ahead of a widely expected interest rate cut by the Federal Reserve later in the day.

The central bank has already lowered borrowing costs twice this year, with a drawn out U.S.-China trade war taking a toll on the domestic economy and raising fears of a slowdown.

Odds of a rate cut have ballooned to over 97% from about 40% a month earlier. Hopes of a rate cut and optimism around trade talks have pushed the benchmark S&P 500 to record highs in the last two sessions.

Nearly half of the S&P 500 companies have posted quarterly results so far, of which 77.1% have beaten profit estimates. Still, analysts are expecting a 1.9% drop in third-quarter earnings, according to Refinitiv data.

General Electric Co <GE.N> gained 5.2% in premarket trading after the industrial conglomerate beat quarterly profit estimates and raised its cash forecast for the year.

Advanced Micro Devices Inc <AMD.O> dropped 1.3% after the chipmaker forecast fourth-quarter sales below expectations.

Before the Fed's policy decision, a Commerce Department's gross domestic product report is likely to indicate that the U.S. economy is losing speed, but not tipping into recession.

Traders work on the floor at the New York Stock Exchange (NYSE) in New York, U.S., October 22, 2019. REUTERS/Brendan McDermid

The data, due at 8:30 a.m. ET, is likely to show U.S. economy slowed to 1.6% in the third quarter from 2% in the April-June period.

At 7:15 a.m. ET, Dow e-minis <1YMcv1> remained unchanged. S&P 500 e-minis <EScv1> were up 0.75 points, or 0.02% and Nasdaq 100 e-minis <NQcv1> were up 7.75 points, or 0.1%.

Among other stocks, Mattel Inc <MAT.O> surged nearly 20% after the toymaker reported a surprise jump in quarterly revenue on higher demand for newer models of its flagship Barbie brand and dolls based on Korean pop-sensation BTS.

Johnson & Johnson <JNJ.N> rose 2.8% as the company said 15 new tests found no asbestos in a bottle of baby powder that the U.S. Food and Drug Administration says tested positive for trace amounts of asbestos. FDA said it stands by its finding.

(Reporting by Arjun Panchadar in Bengaluru)

[© 2019 Thomson Reuters. All rights reserved.]

Copyright 2019 Reuters. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.  Thompson Reuters is solely responsible for this content.