Futures jump with focus on earnings, easing of lockdowns
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[April 28, 2020] By
C Nivedita
(Reuters) - U.S. stock index futures rose
on Tuesday after a round of quarterly earnings reports brought upbeat
signs from Pfizer and respiratory mask-maker 3M for investors
increasingly hopeful of a relaunch of business across the economy.
3M Co <MMM.N>, the world's biggest maker of N95 respirator masks, rose
3.4% in premarket trading after reporting better-than-expected quarterly
profit, although it suspended its 2020 forecast due to the health
crisis.
Drugmaker Pfizer Inc <PFE.N> reiterated its full-year forecast and
reported higher sales of its pneumonia vaccine as physicians prescribed
it to prevent infections caused by the virus. Its shares gained 1.7%.
Investors are now gearing up for one of the busiest weeks for high
profile tech-related earnings reports from Microsoft Corp <MSFT.O>,
Google-parent Alphabet Inc <GOOGL.O>, Amazon.com Inc <AMZN.O> and eBay
Inc <EBAY.O>.
"This is going to be an important test for the market as lots of
businesses moved online following the lockdown," said Andrea Cicione,
head of strategy at TS Lombard in London.
"If these big heavyweights in the tech space don't deliver on the
expectations, then of course the rally we've seen over the past few
weeks (will) have to be questioned."
Wall Street has recovered more than 30% from its March lows, rescued by
official stimulus efforts and, more recently, by signs states were
moving to let businesses reopen after a near total halt in activity.
Still, the benchmark S&P 500 index remains more than 17% off a record
high hit in February and analysts have warned of further losses if a
deep global recession, as many now expect, sets in.
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The New York Stock Exchange (NYSE) is seen in the financial district
of lower Manhattan during the outbreak of the coronavirus disease
(COVID-19) in New York City, U.S., April 26, 2020. REUTERS/Jeenah
Moon
Consumer confidence figures for April due later in the day are expected to slide
further from near three-year lows hit in March, as widespread production halts
put millions of Americans out of work.
Investors are also watching a two-day Federal Reserve policy meeting that kicks
off on Tuesday, although expectations are low for more central bank easing at
this time.
Elsewhere, the damage from the lockdowns continued to mount, with Southwest
Airlines <LUV.N> down 2.1% after reporting its first quarterly loss in nine
years due to the virtual halt in global travel.
Ford Motor Co <F.N> and Starbucks Corp <SBUX.O> are among other big names
reporting after markets close.
At 7:51 a.m. ET, Dow e-minis <1YMcv1> were up 336 points, or 1.4%, S&P 500
e-minis <EScv1> were up 35.75 points, or 1.25% and Nasdaq 100 e-minis <NQcv1>
were up 98.5 points, or 1.12%.
The CBOE volatility index <.VIX>, a measure of investor anxiety, fell on Tuesday
and hovered near two month lows, indicating a risk-on sentiment.
(Reporting by C Nivedita and Shreyashi Sanyal in Bengaluru; Editing by Patrick
Graham and Sagarika Jaisinghani)
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